India has issued a tax demand of $601 million against Samsung and its executives, accusing the company of evading import tariffs on critical telecom equipment, Reuters news report said.
The demand includes $520 million in unpaid taxes and an additional 100 percent penalty. Seven senior executives, including the network division’s vice president Sung Beam Hong, Chief Financial Officer Dong Won Chu, and other key finance officials, face fines totaling $81 million.
The dispute revolves around Samsung’s import of the Remote Radio Head, a vital component in 4G telecom networks, which was brought into India without paying the required 10-20 percent tariff.
Samsung has supplied these components to Reliance Jio, the leading telecom operator owned by billionaire Mukesh Ambani. Indian telecom equipment market is dominated by suppliers such as Huawei, Ericsson, and Nokia.
Indian tax authorities argue that the company deliberately misclassified the component to avoid duties, despite being aware of its correct classification. A confidential government order dated January 8, reviewed by Reuters, stated that Samsung knowingly and intentionally presented false documents and transgressed all business ethics to maximize profits at the expense of the Indian government.
The investigation into Samsung began in 2021, with tax officials conducting searches at the company’s offices in Mumbai and Gurugram, seizing documents, emails, and electronic records. Indian authorities found that between 2018 and 2021, Samsung imported $784 million worth of these components from Korea and Vietnam without paying duties.
Samsung defended its classification by citing four expert opinions, arguing that the component did not function as a transceiver and was therefore exempt from tariffs. However, Indian authorities countered this claim with Samsung’s own 2020 correspondence with the government, in which the company described the component as a transceiver.
Samsung has denied any wrongdoing, stating that the dispute is based on differences in classification interpretation and that it has always complied with Indian laws. The company is currently evaluating legal options to challenge the tax order.
Baburajan Kizhakedath
