Indian government have banned at least two of ByteDance's bank accounts for suspected tax avoidance, prompting the corporation to ask a court to overturn the directive, which it fears will disrupt its operations.
ByteDance cut its Indian labor force in January 2021 after New Delhi decided to maintain a ban on its famous video application TikTok, which was first banned last year regarding a conflict between China and India. China has frequently attacked India's move, alleging that it violates World Trade Organization (WTO) rules. ByteDance, which posted a message in response to the Indian judgment, employs approximately 1,300 people in India, the majority of whom work on tasks such as content moderation. The government ordered the blocking of 2 of ByteDance India's accounts at HSBC and Citibank in mid-March 2021, due to alleged tax avoidance in digital advertising involvements between India’s office and its parent organization in Singapore, TikTok Pte Ltd. The officials also ordered HSBC and Citibank to prohibit ByteDance India from transferring cash from any other bank accounts associated with its tax file number. ByteDance stated that despite having nearly about $10 million in its accounts, the decision of putting a ban was a mistreatment of the legal system and would make it difficult to pay wages and taxes.
ByteDance stated that it does not agree with the tax committee's decision in this issue, and also that it is engaged to legal compliance and will comply with the law. HSBC and Citibank refused to respond, and the ministry of finance did not reply to such an inquiry. The TikTok application ban was implemented after India blacklisted dozens of Chinese applications in 2020 for the interest of sovereignty and national security. The order to block ByteDance India's bank accounts came after financial regulators investigated paperwork at the company's headquarters and scrutinized some documents, and questioned a few other employees about advertising and other transactions with its parent entity.