The South Korean multinational corporation Samsung, known for its appliances and consumer electronics, has petitioned an Indian tribunal to dismiss a tax demand amounting to $520 million, as reported by Reuters.
This tax claim pertains to the alleged misclassification of imports related to networking equipment. Samsung contended that the authorities were aware of this practice, noting that Reliance Industries Ltd. had been importing the same components in a similar fashion for several years.
Earlier this year, Volkswagen India also filed a lawsuit against the Union of India in an attempt to overturn a staggering tax demand of $1.4 billion, claiming that the demand contradicts the government’s rules on import taxation.
In the case involving Samsung, tax officials requested the payment of $520 million in January for allegedly evading tariffs ranging from 10% to 20% by misclassifying imports of essential mobile tower equipment. This equipment was sold to the telecommunications giant, Reliance Jio, from 2018 to 2021.
In its extensive 281-page appeal submitted to the Customs Excise and Service Tax Appellate Tribunal in Mumbai, Samsung criticized Indian tax authorities for being “fully aware” of the business model, as Reliance had a “long-established practice” of importing the same equipment without incurring tariffs for three years until 2017, according to Reuters.
The report further indicated that during an investigation by Indian tax authorities, Samsung’s Indian unit discovered that Reliance had been warned about this practice back in 2017 but failed to inform Samsung about it.
