The Indian government has served a tax notice of $601 million (or ₹5,000 crore) to Samsung Electronics for the import of critical equipment utilized in mobile towers. This is one of the biggest tax notices given to a company in recent history. The figure in question is more than half of Samsung's last year's net profit in India, which was $955 million (approximately ₹8,000 crore). The company will likely contest the notice in a court or a tribunal.
Tax Evasion Charges Against Samsung
Samsung has been providing telecommunication equipment in India through its channel. Indian authorities warned Samsung in 2023 for misclassifying major mobile tower parts to evade 10%-20% import tariffs. These parts were sold to Reliance Jio, according to reports.
Samsung responded that its products were exempt from tariffs and that the practice of classification by it had existed for years with the authorities' knowledge. This was turned down by the customs officials, according to an official order made on January 8, 2024.
Penalty & Total Tax Liability
The government ordered Samsung to pay:
- ₹4,460 crore ($520 million) as arrear taxes
- 100% penalty on evaded tax
- ₹650 crore ($81 million) worth of fines issued to seven senior Samsung executives
The aggregate notice of tax equals $610 million (₹5,000 crore). Samsung has stated that it is considering legal options to challenge these notices.
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