Samsung fights $520 million India tax demand, points to Reliance practice

Written by Aditya Calra and Erban Chatorphdey

New Delhi (Reuters) -Samsung asked an Indian court to cancel the tax demand of $ 520 million due to the poor classification of imports from network equipment, and those responsible for the practice of relying on India realize the same component in a similar way for years.

Samsung has become the second major foreign company in recent months to challenge Indian tax demand.

Volkswagen filed a lawsuit against the government of Prime Minister Narendra Modi in court for a record of $ 1.4 billion to classify the imports of components.

In the Samsung case, the tax authorities in January asked Samsung to pay $ 520 million to evade the customs tariff by 10-20 % by classifying imports for the main portfolio equipment, which was then sold to the MUKESH Ambani GIANT billionaire, RLIANCE JIO, from 2018 to 2021.

In its challenge of 281 pages in the Customs Appeal and Tax Court in Mumbai, Samsung criticizes the Indian authorities for being “fully aware of the work model as the accreditation had a” long practice “to import the same equipment without any introductory payments for a period of three years until 2017.

The Samsung Unit of India says it discovered during an Indian tax investigation that the accreditation had been warned of this practice in 2017, but Relination did not inform the South Korean company about this and tax officials did not ask about Samsung.

“The classification adopted by the appellant (Samsung) is known to the authorities, yet the same thing was interrogated … the administration was fully aware,” Samsung says in his file on April 17, and he was unprecedented.

He adds that “Rellence Jio did not report JIO officials” Samsung’s tax warning for 2017.

Samsung and the tax authority in India did not respond to Reuters inquiries.

More details about the 2017 Rellence Warning of the tax authorities is not general and not disclosed in the Samsung file. He did not respond to Reuters inquiries.

Other than $ 520 million, the Indian authorities also imposed a fine of 81 million dollars on seven of its employees, as they obtained the total demand for taxes to $ 601 million. It is not clear whether Samsung staff unite fines separately.

The tax demand is a large part of the net profit last year of $ 955 million for Samsung in India, as it is one of the largest players in the electronics market and consumer smartphones.

In defending the customs tariff ads, Samsung also argued in its file that the tax authority issued the matter in January “in haste” and a “fair opportunity” was provided to present its case, despite the “huge risks”.