India issued a $601 million tax demand against Samsung on Tuesday, accusing the South Korean company of misclassifying key telecom equipment imports to evade customs duties. The case stems from an investigation into Samsung’s network division and its supply of telecom components to Reliance Jio, owned by billionaire Mukesh Ambani.
The Directorate of Revenue Intelligence (DRI) said that Samsung put networking equipment called Remote Radio Heads in a category that didn’t have to pay import taxes on purpose. This way, they avoided paying 10% or 20% tariffs.
The component, a part of 4G telecom infrastructure, was imported from Korea and Vietnam between 2018 and 2021. During that period, officials claimed that Samsung did not pay duties on $784 million worth of imports.
India tax authorities accuse Samsung of tax evasion
Indian customs authorities have refuted Samsung’s arguments that the component was duty-free, stating that it performs the function of a transceiver, which is subject to import taxes. The dispute ballooned following a confidential January 8 order by customs commissioner Sonal Bajaj, who inculpated Samsung for knowingly submitting false documents.
Bajaj’s order claimed that Samsung “transgressed all business ethics and industry standards” in its pursuit of profit while defrauding the government.
A report from Reuters says that the investigation started in 2021. Indian tax officials searched Samsung’s offices in Mumbai and Gurugram and took documents, emails, and electronics. Later, a number of top executives were questioned. These included Vice President of the Network Division Sung Beam Hong and CFO Dong Won Chu.
Samsung ordered to pay fines
The customs department has told Samsung it needs to pay 520 million rupees in unpaid taxes and a penalty of the same amount. In addition, seven officials will have to pay fines totaling $81M.
According to Samsung, the disagreement is about “interpretation of classification of goods by customs.” Hence, they have strongly denied doing anything wrong. It was said again that the company had followed Indian law and that it would go to court to fight the order.
The company provided a basis for its plea, saying Indian authorities had accepted its classification practice for years. It presented four expert opinions to support its stance that Remote Radio Heads were not transceivers and, therefore, not subject to import duties.
Yet, Indian tax officials countered this by revealing 2020 documents from Samsung itself, in which the company described the component as a transceiver.
PwC in trouble for classifying proponents
The tax dispute has also implicated PricewaterhouseCoopers (PwC), which Samsung had hired to classify the network equipment. According to reports from local outlets, PwC received a show cause notice from the DRI alongside Samsung India, though details of the consulting firm’s role remain unclear.
Samsung has the option to contest the tax demand before a tribunal or in court, a process that could take years to resolve. Given that the claim represents more than 60% of Samsung India’s 2023 net profit of $955 million, the outcome of the dispute spells significant financial implications for the company’s operations in the country.
India’s tech sector to grow 20% in 2025, report says
Meanwhile, India’s technology job market is projected to increase by 20% in employment, driven largely by a 75% surge in demand for professionals in artificial intelligence (AI), cybersecurity, and cloud computing, according to a new report by Instahyre.
Instahyre Tech Salary Index 2025 covered hiring trends, salary fluctuations, and the growing necessity for specialized skills in the sector. The report found that nearly 40% of the workforce will need to upskill to remain competitive.
Bengaluru continues to lead as India’s primary tech epicenter, employing 35% of the sector’s workforce, followed by Delhi-NCR and Hyderabad at 20%. Yet, the report noted workers coming from tier-2 cities such as Chandigarh, Jaipur, and Indore.
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