In the order, the authorities ordered Samsung to pay 44.6 billion rupees ($520 million), which included unpaid taxes and a penalty of 100%.
New Delhi: Samsung India is facing serious challenges as the Modi government has directed the South Korean tech giant and its Indian executives to pay USD 601 million for tax evasion and non-compliance with import tariffs on key telecom equipment. Notably, Samsung is a well-established brand in India with strong market value.
To recall, the Indian authorities gave a stern warning to the company in 2023 for misclassifying its imports to escape payments of taxes. The company was required to pay 10-20 percent tax on import of substantial equipment for mobile towers. It then sold these equipment to Mukesh Ambani’s telecom company, Reliance Jio.
Samsung urged the tax authority in India to halt its investigation, arguing that the equipment in question was not subject to tariffs and that officials had long been aware of its classification practices. However, the authorities rejected this request in a confidential order dated January 8. In the ruling, Commissioner of Customs Sonal Bajaj stated that Samsung had “violated” the law and had “knowingly and intentionally presented false documents before the customs authority for clearance.”
He added that Samsung “transgressed all business ethics and industry practices or standards in order to achieve their sole motive of maximising their profit by defrauding the government exchequer.”
In the order, the authorities ordered Samsung to pay 44.6 billion rupees ($520 million), which included unpaid taxes and a penalty of 100%. The order also mentioned that the company’s seven executives are also ordered to pay a fine of $81 million, these include the network division’s vice president, Sung Beam Hong, Chief Financial Officer Dong Won Chu and Sheetal Jain, a general manager for finance, as well as Nikhil Aggarwal, Samsung’s general manager over indirect taxes.
“The issue involves the interpretation of classification of goods by customs. We are assessing legal options to ensure our rights are fully protected,” said Samsung in an official statement, making clear that it complied with the laws.
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