Samsung turns into the second main international firm in current months to problem an Indian tax demand.
Volkswagen has sued Prime Minister Narendra Modi’s authorities in courtroom for a report demand of $1.4 billion (roughly Rs. 11,797 crore) for misclassifying its element imports.
In the Samsung case, tax authorities in January requested Samsung to pay $520 million (roughly Rs. 4,381 crore) for evading the 10-20 p.c tariffs by misclassifying imports of a key cell tower tools, which it then offered to billionaire Mukesh Ambani’s telecom large, Reliance Jio, from 2018 to 2021.
In its 281-page problem on the Customs Excise and Service Tax Appellate Tribunal in Mumbai, Samsung criticises Indian authorities for being “totally conscious” of the enterprise mannequin as Reliance had a “long-established observe” of importing the identical tools with none tariff funds for 3 years till 2017.
Samsung’s India unit says it found throughout an Indian tax investigation that Reliance had been warned concerning the observe means again in 2017, however Reliance didn’t inform the South Korean firm about it and tax officers by no means questioned Samsung.
“The classification adopted by the appellant (Samsung) was identified to the authorities, nevertheless the identical was by no means questioned … Department was totally conscious,” Samsung says in its April 17 submitting, which isn’t public however was seen by Reuters.
“Reliance Jio officers didn’t inform” Samsung concerning the tax warning of 2017, it provides.
Samsung and India’s tax authority didn’t reply to Reuters queries.
Further particulars of Reliance’s 2017 warning from tax authorities will not be public and weren’t disclosed within the Samsung submitting. Reliance did not reply to Reuters queries.
Other than $520 million (roughly Rs. 4,381 crore) demand Samsung faces, Indian authorities have additionally imposed an $81 million (roughly Rs. 682 crore) positive on seven of its staff, taking the entire tax demand to $601 million (roughly Rs. 5,066 crore). It’s not clear if Samsung staff are individually difficult the fines.
The tax demand represents a considerable chunk of final yr’s web revenue of $955 million (roughly Rs. 8,050 crore) for Samsung in India, the place it is without doubt one of the largest gamers within the shopper electronics and smartphones market.
In defending its tariff declarations, Samsung additionally argues in its submitting that the tax authority handed the order in January “in a rush” and it was not offered “a good alternative” to current its case, regardless of the “large stakes” concerned.
The Samsung case issues imports of a element known as “Remote Radio Head”, a radio-frequency circuit enclosed in a small outside module, that tax officers say is “one of the crucial vital” components of 4G telecoms techniques.
The case towards Samsung alleges it misclassified the element’s imports price $784 million (roughly Rs. 6,609 crore) from Korea and Vietnam between 2018 to 2021, to maximise earnings.
Investigators discovered that Samsung “transgressed all enterprise ethics and trade practices or requirements in an effort to obtain their sole motive of maximising their revenue by defrauding the federal government exchequer,” the January order acknowledged.
© Thomson Reuters 2025
(This story has not been edited by NDTV employees and is auto-generated from a syndicated feed.)
