Indian authorities have blocked bank accounts of ByteDance in the country for alleged tax evasion and the company has asked a court to quash the directive which it fears will hit its operations hard, two sources with direct knowledge told Reuters. ByteDance in January cut its Indian workforce after New Delhi decided to retain a ban on its popular video app TikTok, first prohibited last year following a border clash between India and China. China has repeatedly criticized India’s move and said it suspected it was against WTO rules. ByteDance still has around 1,300 employees in India, most of whom service its overseas operations, including work on activities such as content moderation.
In mid-March, two of ByteDance India’s bank accounts in Citibank and HSBC were ordered blocked by authorities for alleged evasion of certain taxes in online advertising dealings between the ByteDance unit in India and its parent entity in Singapore, TikTok Pte Ltd, the two sources said.

Other than the two accounts, the authorities also directed Citibank and HSBC to not allow ByteDance India to withdraw funds from any other bank accounts linked to its tax identification number, the first source said. In a court filing which is due to be heard soon at a High Court in the financial capital Mumbai – ByteDance India has argued that while it had only about $10 million in its accounts, the blocking decision was an abuse of the legal process and will make it hard for it to pay salaries and taxes, the source added.