Winning Bizness Desk
Mumbai.Samsung has filed a petition before India’s tax tribunal challenging a tax demand notice of ₹4,451 crore (around \$520 million). The Income Tax Department had accused the South Korean tech giant of misclassifying telecom equipment imports to avoid higher tariffs. According to the government, Samsung wrongly declared certain network transmission components used in telecom towers to escape duties of 10% to 20%. These imports were made through its network division and sold to Reliance Jio between 2018 and 2021.
Samsung Refers to Jio’s Similar Import Practices
In its petition, Samsung argued that tax officials were aware that Reliance Jio was importing similar equipment until 2017 without facing any action. The company claimed that it was not informed about any prior warnings issued to Reliance. Had Samsung known about it earlier, it could have avoided this dispute altogether. The firm also challenged a separate penalty of \$81 million (₹693 crore) imposed on seven of its executives in connection with the case.
Allegations of Pressure and False Documentation
The dispute deepened when Samsung allegedly pressured tax authorities to close the investigation, asserting that the components in question were not liable for tariffs and that their classification method had been long known to Indian officials. However, the Customs Department, in its January 8 order, rejected Samsung’s claims. Customs Commissioner Sonal Bajaj accused Samsung of violating Indian laws and deliberately submitting false documents to secure customs clearance, while also breaching business ethics and industry standards.
Company Denies Wrongdoing
Responding to the allegations, Samsung stated it has always complied with Indian laws and is committed to defending its legal rights. The company said it is evaluating all legal options to safeguard its interests. Samsung reiterated that its classification of imports was in line with existing practices and was transparent to regulators.
Timeline of Investigation
The investigation into Samsung began in 2021 when tax officials raided the company’s offices in Mumbai and New Delhi. During the searches, investigators seized documents, emails, and electronic devices. Subsequently, several senior Samsung officials were questioned. Authorities later found that Samsung had imported components worth ₹6,711 crore (\$784 million) from Korea and Vietnam between 2018 and 2021 without paying the required duties.
Key Points in Brief:
1. Samsung challenged a ₹4,451 crore tax notice in India’s tax tribunal.
2. The government accused it of misclassifying telecom equipment to avoid duties.
3. Samsung cited Reliance Jio’s similar imports till 2017 to defend its case.
4. A penalty of ₹693 crore was imposed on seven Samsung officials.
5. Customs officials accused the company of using false documents.
6. Samsung denied wrongdoing and said it followed Indian laws.
7. Investigation began in 2021 with office raids and evidence seizure.
