Samsung has taken a strong stand against a $520 million tax demand issued by Indian authorities, calling it unfair and accusing officials of ignoring similar import practices by other companies for years. The South Korean electronics giant has filed a 281-page appeal with a tribunal in Mumbai, asking for the entire tax claim to be dismissed.
This comes after Indian tax officials accused Samsung of misclassifying imported telecom equipment to avoid higher duties. The equipment was later sold to Reliance Jio, the telecom company owned by Indian billionaire Mukesh Ambani.
The issue goes back to imports Samsung made between 2018 and 2021. Tax authorities believe Samsung should have paid a 10–20% duty on a component called the Remote Radio Head — a key part of mobile towers. Instead, the company allegedly declared it under a different category to avoid the higher tariffs.
But in its legal filing, Samsung argues that Indian customs officials were fully aware of the classification all along. “The classification adopted by the appellant (Samsung) was known to the authorities, however the same was never questioned … Department was fully aware,” the company wrote in its April 17 filing to the Customs Excise and Service Tax Appellate Tribunal (CESTAT) in Mumbai.
According to Samsung, Reliance Jio had been importing the same equipment in the same way from 2014 to 2017 without paying tariffs. Samsung says this business model had been “long-established” and known to Indian tax officials for years.
Samsung also revealed that Reliance was warned by authorities back in 2017, but that warning was never shared with Samsung. “Reliance Jio officials did not inform” Samsung about the 2017 warning, the company said.
Both Samsung and India’s tax department declined to respond to questions from Reuters, which accessed the legal filing. Reliance Jio also did not reply to requests for comment. The details of the 2017 warning to Reliance have not been made public and are not included in Samsung’s tribunal filing.
Apart from the main $520 million tax demand, Indian authorities have also imposed personal fines totaling $81 million on seven Samsung employees. That brings the total amount of tax- penalties to $601 million.
It’s not yet clear whether the employees are planning to challenge the fines on their own.
The tax demand is a serious hit for Samsung’s India operations. In 2023, the company reported a net profit of $955 million in India, which means the combined tax claims would wipe out more than 60% of that profit.
Samsung is a major player in the Indian market, especially in smartphones and consumer electronics. A ruling against it could have wider effects on foreign businesses importing components into India.
In its legal challenge, Samsung also slammed the tax department for rushing the case and not giving the company enough time to explain its side. The January order demanding $520 million was passed “in a hurry,” Samsung said, adding that it was denied a “fair opportunity” to defend itself properly — especially considering what’s at stake.
The component in question — the Remote Radio Head — is described by tax officials as “one of the most important” pieces of 4G telecom systems. It’s a radio-frequency circuit that’s housed in a compact outdoor unit and used in mobile networks.
The government says Samsung imported $784 million worth of these units from South Korea and Vietnam between 2018 and 2021, but classified them incorrectly to lower costs and increase profits.
In their January order, investigators said Samsung “transgressed all business ethics and industry practices or standards in order to achieve their sole motive of maximising their profit by defrauding the government exchequer.”
