Exclusive-India slaps Samsung with tax demand of $601 million for telecom imports

By Aditya Kalra and Aditi Shah

NEW DELHI (Reuters) - India has ordered Samsung and its executives successful the state to wage $601 cardinal successful backmost taxes and penalties for dodging tariffs connected import of cardinal telecoms equipment, a authorities bid showed, for 1 of the biggest specified demands successful caller years.

The request represents a important chunk of past year's nett net of $955 cardinal for Samsung successful India, wherever it is 1 of the largest players successful the user electronics and smartphones market. It tin beryllium challenged successful a taxation tribunal oregon the courts.

The company, which besides imports telecoms instrumentality done its web division, received a informing successful 2023 for misclassifying imports to evade tariffs of 10% oregon 20% connected a captious transmission constituent utilized successful mobile towers.

It imported and sold these items to billionaire Mukesh Ambani's telecom giant, Reliance Jio.

Samsung pushed India's taxation authorization to driblet the scrutiny, saying the constituent did not pull tariffs and officials had known its classification signifier for years.

But customs authorities disagreed successful a confidential January 8 bid that is not nationalist but was reviewed by Reuters.

Samsung "violated" Indian laws and "knowingly and intentionally presented mendacious documents earlier the customs authorization for clearance", Sonal Bajaj, a commissioner of customs, said successful the order.

Investigators recovered that Samsung "transgressed each concern morals and manufacture practices oregon standards successful bid to execute their sole motive of maximising their nett by defrauding the authorities exchequer," Bajaj added.

Samsung was ordered to wage 44.6 cardinal rupees ($520 million), consisting of unpaid taxes and a punishment of 100%.

Seven India executives look fines of $81 million, among them the web division's vice president, Sung Beam Hong, Chief Financial Officer Dong Won Chu and Sheetal Jain, a wide manager for finance, arsenic good arsenic Nikhil Aggarwal, Samsung's wide manager for indirect taxes, the bid showed.

"The contented involves the mentation of classification of goods by customs," Samsung said successful a statement, adding that it complied with Indian laws. "We are assessing ineligible options to guarantee our rights are afloat protected."

India's customs authorization and the concern ministry did not respond to Reuters' queries. Reliance besides did not respond.

The incidental comes arsenic India toughens oversight of overseas companies and their imports.

Volkswagen and New Delhi are locked successful a ineligible conflict successful which the automaker is challenging a grounds request of $1.4 cardinal successful import backmost taxes connected grounds of misclassifying car parts.