South Korean tech giant Samsung Electronics is mounting a legal defense against a $520 million tax demand from Indian authorities, arguing that the government was fully aware of its import classification practices, which were allegedly modeled after those used for years by Reliance Jio, India’s largest telecom operator.
In a 281-page filing with the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in Mumbai, Samsung India contends that tax officials failed to raise any objections over several years, despite the company importing a key telecom component — Remote Radio Head (RRH) — under a tariff classification that attracted lower duties. Authorities now allege Samsung misclassified the equipment to evade customs tariffs ranging from 10 percent to 20 percent.
The telecom network equipment, crucial for 4G mobile towers, was supplied by Samsung to Mukesh Ambani’s Reliance Jio between 2018 and 2021.
Samsung’s filing reveals that Reliance Jio had itself imported the same component in a similar manner without facing penalties until it received a warning from tax authorities in 2017 — information that Samsung claims was never shared with it, Reuters news report said.
“The classification adopted by the appellant was known to the authorities, however the same was never questioned … Department was fully aware,” Samsung stated in its April 17 submission.
Samsung also asserts that Reliance Jio “did not inform” it of the 2017 tax warning, a point that raises questions about internal communication and due diligence between the long-time business partners.
The company accuses Indian tax authorities of rushing the process, claiming the January 2025 order was issued without giving Samsung “a fair opportunity” to present its case. Alongside the corporate penalty, seven Samsung employees face personal fines totaling $81 million.
The stakes are high: the $520 million demand amounts to more than half of Samsung India’s $955 million net profit in 2024. With its dominant position in India’s consumer electronics and mobile phone markets, the outcome of this legal battle could significantly impact the company’s operational model in the region.
Reliance Jio and India’s tax department have so far declined to comment on the developments.
As Samsung pursues legal relief, its strategy appears focused on leveraging historical precedent and the government’s prior knowledge of industry practices — suggesting that the tech giant will seek to shift some of the spotlight to its influential Indian partner.
TelecomLead.com News Desk
