Samsung challenges $520 million India tax demand

Samsung has asked an Indian tribunal to quell a $520 million tax demand for allegedly misclassifying imports of networking gear. The Korean giant argued that officials were aware of the practice as India’s Reliance imported the same component in a similar manner for years, documents show. Samsung becomes the second major foreign company in recent months to challenge an Indian tax demand. Earlier Volkswagen has sued the Modi government for a record demand of $1.4 billion for misclassifying its component imports.

In the case of Samsung, Indian tax authorities in January demanded the company pay $520 million, accusing it of evading 10–20% import tariffs by misclassifying a crucial mobile tower component. The equipment was reportedly sold to Mukesh Ambani’s Reliance Jio between 2018 and 2021, Reuters reported.

In its 281-page appeal filed with the Customs Excise and Service Tax Appellate Tribunal (CESTAT) in Mumbai, Samsung strongly criticized the tax authorities. The company argued that officials were “fully aware” of its import practices, noting that Reliance had followed a “long-established practice” of importing the same equipment without paying tariffs for at least three years until 2017.

Samsung's India unit says it discovered during an Indian tax investigation that Reliance had been warned about the practice way back in 2017, but Reliance did not inform the South Korean company about it and tax officials never questioned Samsung. 

Samsung challenges $520 million India tax demand

Samsung has asked an Indian tribunal to quell a $520 million tax demand for allegedly misclassifying imports of networking gear. The Korean giant argued that officials were aware of the practice as India’s Reliance imported the same component in a similar manner for years, documents show. Samsung becomes the second major foreign company in recent months to challenge an Indian tax demand. Earlier Volkswagen has sued the Modi government for a record demand of $1.4 billion for misclassifying its component imports.

In the case of Samsung, Indian tax authorities in January demanded the company pay $520 million, accusing it of evading 10–20% import tariffs by misclassifying a crucial mobile tower component. The equipment was reportedly sold to Mukesh Ambani’s Reliance Jio between 2018 and 2021, Reuters reported.

In its 281-page appeal filed with the Customs Excise and Service Tax Appellate Tribunal (CESTAT) in Mumbai, Samsung strongly criticized the tax authorities. The company argued that officials were “fully aware” of its import practices, noting that Reliance had followed a “long-established practice” of importing the same equipment without paying tariffs for at least three years until 2017.

Samsung's India unit says it discovered during an Indian tax investigation that Reliance had been warned about the practice way back in 2017, but Reliance did not inform the South Korean company about it and tax officials never questioned Samsung.