The war between the Indian government and ByteDance has intensified, months after the company trimmed its operations in India following the move by regulators to ban TikTok in what was at the time its largest market outside China.
According to a Reuters report, Indian regulators have frozen the bank accounts of ByteDance over alleged tax evasion, a move the company has challenged in court.
The report says the move took place in mid-March, as two of the company’s bank accounts in Citibank and HSBC were ordered blocked for alleged evasion of taxes related to online advertising dealings between ByteDance and its parent entity in Singapore, TikTok Pte Ltd.
Authorities also directed the two banks not to allow Bytedance to withdraw funds from any other bank accounts linked to its tax identification number.
ByteDance has reporedlty argued in a cuort document that its entire business had come to a standstill due to the bank freeze and that its rights to “carry free trade and business” had been violated. The report cited a source saying employee salaries and vendor payments could be affected.
Since 2016, India has imposed an ‘Equalisation Levy’ on online advertisements and related payments for provision of digital advertising space, at a rate of six per cent for non-residents that do not have a permanent establishment in India, and at two per cent on considerations received or receivable by e-commerce operators from e-commerce supply or services made or provided or facilitated to Indian residents, those who not resident in India but who undertake sale of adverts that targets Indian residents or sale of data from people resident in India.
While TikTok amassed hundreds of millions of users in India, it lost all of these after border tensions between India and China in 2020 were followed by authorities banning the app in India over "national security" concerns.