The company said in a new filing filed last week that it was unable to pay foreign suppliers.
ET was the first to report last week that the IT department has accused the company of repatriating large amounts to the parent company, reducing its taxable income in India.
Amid alleged discrepancies in earnings declared by Huawei Telecommunications India for at least two financial years, the department said in its affidavit submitted to the court last week that the company had repatriated £750m “even as its earnings fell drastically”.
Huawei’s lawyer said the company had received orders from customers, mainly Indian telecom operators, for telecom equipment and services “in the ordinary course of business”. Customer contracts require the company to import equipment and spare parts from its overseas suppliers, the attorney said. “Orders are placed according to the company’s long-term contracts, and it (Huawei) has a contractual and legal obligation to fulfill those orders,” he said. The company was “unable to make any payments to said foreign suppliers” due to the Supreme Court order.
The firm said it “commits that no dividends or royalties will be repatriated without court approval.” The bank asked them to provide specific details on payments to foreign suppliers and issued notices to the IT department asking them to respond to Huawei’s request within two weeks.
FIVE CONDITIONS
At the April 21 hearing, Huawei India’s lawyer had told the Supreme Court that the company had defaulted on the payment of statutory duties such as GST and TDS due to the seizure of its bank accounts by the Income Tax Authority. The company had also said it was unable to pay salaries to its 400 permanent employees and 190 contract workers, as well as clear fees from vendors and suppliers. The Supreme Court had said the matter required “detailed scrutiny” and had suspended the IT department’s bank account seizures on five conditions to “balance equity”.
