Samsung Ordered to Pay $601 Million in Again Taxes in India, Penalties Over Telecom Imports

India has ordered Samsung and its executives within the nation to pay $601 million (roughly Rs. 5,149 crore) in again taxes and penalties for dodging tariffs on import of key telecoms gear, a authorities order confirmed, for one of many greatest such calls for lately.

The demand represents a considerable chunk of final yr’s internet revenue of $955 million (roughly Rs. 8,183 crore) for Samsung in India, the place it is likely one of the largest gamers within the client electronics and smartphones market. It may be challenged in a tax tribunal or the courts.

The corporate, which additionally imports telecoms gear by means of its community division, obtained a warning in 2023 for misclassifying imports to evade tariffs of 10 p.c or 20 p.c on a crucial transmission element utilized in cell towers.

It imported and bought these things to billionaire Mukesh Ambani’s telecom big, Reliance Jio.

Samsung pushed India’s tax authority to drop the scrutiny, saying the element didn’t entice tariffs and officers had recognized its classification observe for years.

However customs authorities disagreed in a confidential January 8 order that’s not public however was reviewed by Reuters.

Samsung “violated” Indian legal guidelines and “knowingly and deliberately offered false paperwork earlier than the customs authority for clearance”, Sonal Bajaj, a commissioner of customs, stated within the order.

Investigators discovered that Samsung “transgressed all enterprise ethics and business practices or requirements in an effort to obtain their sole motive of maximising their revenue by defrauding the federal government exchequer,” Bajaj added.

Samsung was ordered to pay 44.6 billion rupees ($520 million), consisting of unpaid taxes and a penalty of one hundred pc.

Seven India executives face fines of $81 million (roughly Rs. 694 crore), amongst them the community division’s vice chairman, Sung Beam Hong, Chief Monetary Officer Dong Gained Chu and Sheetal Jain, a common supervisor for finance, in addition to Nikhil Aggarwal, Samsung’s common supervisor for oblique taxes, the order confirmed.

“The problem includes the interpretation of classification of products by customs,” Samsung stated in a press release, including that it complied with Indian legal guidelines. “We’re assessing authorized choices to make sure our rights are absolutely protected.”

India’s customs authority and the finance ministry didn’t reply to Reuters’ queries. Reliance additionally didn’t reply.

The incident comes as India toughens oversight of overseas corporations and their imports.

Volkswagen and New Delhi are locked in a authorized battle during which the automaker is difficult a report demand of $1.4 billion (roughly Rs. 11,995 crore) in import again taxes on grounds of misclassifying automobile elements.

The German firm denies any wrongdoing in what it known as a “matter of life and loss of life” for its India enterprise, however the dispute has rekindled overseas buyers’ fears over tax tussles.

Distant Radio Head

The Samsung investigation started in 2021 when tax inspectors searched its workplaces within the monetary capital of Mumbai and Gurugram close to New Delhi, seizing paperwork, emails and a few digital gadgets. High executives have been later questioned.

The Samsung dispute facilities on imports of the “Distant Radio Head”, a radio-frequency circuit enclosed in a small outside module that tax officers known as “probably the most vital” elements of 4G telecoms programs.

From 2018 to 2021, Indian officers discovered, Samsung paid no dues on imports price $784 million (roughly Rs. 6,717 crore) of the element from Korea and Vietnam.

The element fitted on telecoms towers transmits alerts and is topic to a tariff, the federal government stated, although Samsung disagreed on the way it features.

Samsung vehemently defended its classification, backed its case with 4 knowledgeable opinions, saying the element didn’t carry out the features of a transceiver and may very well be imported with none obligation, the tax order stated.

As counter proof, tax officers cited 2020 letters from Samsung to the Indian authorities describing the element as a transceiver, which the federal government stated is “a tool which transmits” alerts.

Samsung “was very a lot privy to the fitting classification of the impugned items,” the tax commissioner added.

© Thomson Reuters 2025

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