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Indian authorities have blocked bank accounts of ByteDance in the country for alleged tax evasion.

In response, the company has moved a court to dismiss the directive as it may hit their operations hard.

Last year, tax authorities inspected and scrutinised documents at Bytedance India’s office.

During their interrogation, the authorities found out tax evasion by the company in relation to the advertising and other transactions with its parent entity in Singapore, TikTok Pte Ltd.

In a followup action in mid-March, the authorities redred freezing of ByteDance India’s bank accounts in Citibank and HSBC.

They also directed Citibank and HSBC to not allow ByteDance India to withdraw funds from any other bank accounts linked to its tax identification number.

In response, the company moved Mumbai High Court to quash the directive that would hit its operations.

In its plea, the firm has argued that the freezing of its accounts is an abuse of legal process and will make it difficult for it to pay salaries and taxes.

The company also argued that such an action violates its rights “to carry free trade and business”.

Also, it can hit employee salaries and vendor payments even as the company is struggling with the India ban, the company added.

India had banned Bytedance’s popular video app TikTok last year following a border clash between India and China.

This resulted in ByteDance cutting its India workforce in January.

At present, the company has around 1,300 employees in India, most of whom service its overseas operations, including work on activities such as content moderation.

TikTok also came under the scanner around the globe. Former US President Donald Trump had alleged that the app posed national security concerns as personal data of US users could be obtained by China’s government.

US President Joe Biden’s new administration has paused a government lawsuit that could have resulted in a de facto ban on TikTok’s use in the United States.

 

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