The Delhi High Court has granted Vivo Mobile India temporary reprieve by staying a ₹329 crore tax penalty that was levied by the Income Tax Department. In addition to the stay, the High Court has requested the Income Tax department to respond to the matter. Oppo India is reportedly in a similar situation, facing a penalty that is even larger than Vivo's. The next hearing on the matter is scheduled for September 23.

This development follows earlier scrutiny of Vivo Mobile India regarding alleged financial irregularities. In 2022, the Directorate of Revenue Intelligence (DRI) issued a show cause notice to Vivo Mobile India concerning alleged customs duty evasion amounting to ₹2,217 crore. The Finance Ministry stated that the DRI investigation revealed the company had willfully misdeclared certain imported items used in the manufacturing of mobile phones, resulting in the wrongful availing of duty exemption benefits. Vivo India had reportedly deposited ₹60 crore towards its differential duty liability at the time.

Also in 2022, the Delhi High Court allowed Vivo to operate its bank accounts, which had been frozen by the Enforcement Directorate (ED) during a money-laundering investigation, on the condition that it furnish a bank guarantee of ₹950 crore and maintain a balance of ₹250 crore in its accounts. The ED had blocked nearly 119 bank accounts linked to Vivo's India business and its associates, holding ₹465 crore, as part of the investigation. The ED has stated that it was investigating 22 companies held by foreign entities or based in Hong Kong, which had transferred large sums of money to Vivo. The agency has also stated that money laundering is an act of 'financial terrorism'.

These investigations and penalties are part of a broader trend of increased scrutiny of Chinese mobile phone manufacturers operating in India.