India’s latest move against ByteDance might as well be the final nail in Tiktok’s coffin. The government of India has recently frozen the banking accounts of the Chinese-origin company based on tax evasion concerns!
This development comes two months after ByteDance’s flagship short-video app TikTok got permanently banned in India, post which the Chinese-origin company was compelled to shut down its India operations entirely.
ByteDance has contested the GOI’s ban on TikTok in a Mumbai court by stating that the decision will make it harder for them to pay their salaried employees and the required taxes in India.
And now, this latest blow might be the one that finally knocks down all hope for Tiktok’s return to India – the second-largest country by the number of app users, internet users or mobile phone users.
According to sources in the know, two of ByteDance’s Indian bank accounts registered with Citibank and HSBC respectively were blocked by the authorities in mid-March because of the alleged suspicion of tax evasion arising around the online advertising dealings between the company’s Indian unit and TikTok Pte Ltd. (ByteDance’s parent company headquartered in Singapore).
One of the officials aware of the development mentioned that ByteDance, even though it has laid off a massive chunk of its workforce, still has many individuals working for them. Thus it is currently worried about paying salaries and conducting other business activities now that their accounts are frozen.
ByteDance has retained around 1,300 employees under its Indian arm, most of them associated with the company’s overseas operations by working on areas such as content moderation and more.
When asked about the latest allegations of tax evasion, a ByteDance spokesperson, in response, said that the company is completely committed to adhering to the local laws and regulations of the country and therefore, they disagree with the Indian tax authority’s decision in this matter. But that being said, ByteDance will extend its full support and coordination to the GOI for the investigation of the matter.
Note here that the Indian Authorities have also directed Citibank and HSBC to refrain from allowing ByteDance to withdraw funds from any other bank account that might be linked to its tax identification number.
In their court filing, the company mentioned that it has around $10 million in its banking accounts. However, due to the latest directive by the Indian government, the company will be forced to stop paying salaries and taxes on it, which is a gross violation of the company’s rights “to carry free trade and business”.
All in all, this recent move by GOI was well-anticipated beforehand. Last year, the Indian tax authorities closely inspected ByteDance’s documents while simultaneously questioning some of their executives about its advertising businesses and transactions related to its parent entity.
It now remains to be seen if ByteDance can spring back up from this nightmare. We will keep you updated on all future developments. Until then, stay tuned.