Samsung challenges Indian government in tax tribunal, accuses company of saving tariff of ₹4,451 crore

There is an intense clash between the behemoth tech giant Samsung and the government of India in the realm of tax. The government demanded Rs 4,451 crore ($520 million) in tax from the corporation, against which Samsung approached the tax tribunal.

The Income Tax Department charges that Samsung under-declared the import of telecommunication equipment, thereby evading tariffs of 10-20%. These are the same equipment that have been sold by Samsung to Reliance Jio and which have found use in mobile towers.

Samsung says that the tax officials themselves were aware of this classification, and Reliance Jio was also warned on the same issue in 2017, but they were never informed about it. The company claims that if it had been told on time, it would have made the changes earlier. Not only this, the government has also imposed a fine of Rs 693 crore ($ 81 million) on 7 senior officials of Samsung.

In 2021, the tax department raided Samsung's offices in Mumbai and Delhi, from where emails, documents, and electronic devices were seized. The investigation revealed that between 2018 and 2021, the company ordered components worth about Rs 6,711 crore from Korea and Vietnam, but no tariff was paid on them.

In an order issued on January 8, 2024, Customs Commissioner Sonal Bajaj accused Samsung of deliberately providing fake documents and violating Indian laws and industry standards. According to him, this is not just a case of tax evasion but also a blatant disregard for business ethics.

Samsung has clarified in a statement that it has not violated any Indian law and is now evaluating legal options to protect its rights.