Lagatar24 Desk
New Delhi: In one of the most significant tax demands in recent years, Indian authorities have ordered South Korean tech giant Samsung and seven of its executives to pay $601 million (₹50 billion) in back taxes and penalties over alleged customs duty evasion related to telecom equipment imports, Reuters reported.
The demand includes ₹44.6 billion ($520 million) in unpaid taxes and a 100% penalty, along with $81 million in fines imposed personally on key executives. The case relates to Samsung’s network division, which reportedly misclassified a crucial component used in mobile tower infrastructure to avoid 10%–20% import tariffs.
Serious Allegations Against Samsung’s Network Division
According to a private customs order dated January 8, accessed by Reuters, officials accused Samsung of submitting false documentation to Indian customs authorities. Customs Commissioner Sonal Bajaj wrote that the company “knowingly and intentionally presented false documents” and “violated Indian regulations.”
Bajaj’s order added, “Samsung transgressed all business ethics and industry standards in pursuit of profits by defrauding the government exchequer.”
The component in question was supplied to Reliance Jio, the telecom giant owned by billionaire Mukesh Ambani, the report noted.
Executives Face Personal Penalties
Seven top executives of Samsung’s India unit now face financial penalties totaling $81 million. These include:
• Sung Beam Hong, Vice President, Network Division
• Dong Won Chu, Chief Financial Officer
• Sheetal Jain, General Manager, Finance
• Nikhil Aggarwal, General Manager, Indirect Taxes
Samsung has denied any wrongdoing and said the issue stems from differing interpretations of customs classifications.
Company’s Response
In a statement issued after the report surfaced, Samsung said, “This matter relates to the interpretation of customs classification. Samsung is committed to complying with Indian laws and regulations, and we are currently assessing legal options to ensure our rights are fully protected.”
The $601 million demand represents a significant chunk of Samsung’s India operations, where it posted a net profit of $955 million in 2023. The company retains the right to appeal through tax tribunals or seek judicial redress.
Previous Dispute, Renewed Action
The investigation was triggered in 2023, when Indian customs flagged the classification of imported telecom equipment components. Samsung had attempted to persuade authorities to abandon the case, arguing that its classification method had been accepted for years. However, the customs authority ultimately ruled against the tech major.
