India slaps Samsung with tax demand of ₹5,156 crore for telecom imports

Samsung ordered to pay $601 million in back taxes for dodging tariffs on telecom equipment in India.

Tax authorities have ordered Samsung and its executives in the country to pay ₹5,156 crore ($601 million) in back taxes and penalties for dodging tariffs on import of key telecoms equipment, a government order showed, for one of the biggest such demands in recent years.

The demand represents a substantial chunk of last year's net profit of ₹8,194 crore ($955 million) for Samsung in India, where it is one of the largest players in the consumer electronics and smartphone market. It can be challenged in a tax tribunal or the courts.

The company, which also imports telecoms equipment through its network division, received a warning in 2023 for misclassifying imports to evade tariffs of 10% or 20% on a critical transmission component used in mobile towers.

It imported and sold these items to Reliance Jio.

Samsung pushed India's tax authority to drop the scrutiny, saying the component did not attract tariffs and officials had known its classification practice for years.

But customs authorities disagreed in a confidential January 8 order that is not public but was reviewed by Reuters.

Samsung "violated" Indian laws and "knowingly and intentionally presented false documents before the customs authority for clearance", Sonal Bajaj, a commissioner of customs, said in the order.