Samsung has filed a legal challenge with an Indian tribunal seeking to quash a $520 million tax demand related to the alleged misclassification of imported networking equipment.
The South Korean technology giant is contesting claims by Indian tax authorities that it wrongly classified a key component used in mobile towers, thereby avoiding 10–20% import tariffs on goods supplied to Reliance Jio between 2018 and 2021.
The company’s appeal, lodged with the Customs Excise and Service Tax Appellate Tribunal in Mumbai, argues that Indian authorities were fully aware of the import practices. Samsung states that Reliance Jio had followed a similar import approach from 2014 to 2017, without facing penalties, and claims it was never informed about a 2017 tax warning issued to Reliance.
In its filing, Samsung insists that “the classification adopted by the appellant was known to the authorities, however, the same was never questioned.”
The dispute centers on imports of the “Remote Radio Head,” a core component in 4G telecom infrastructure. Authorities allege that Samsung misclassified $784 million worth of these components, sourced from South Korea and Vietnam, to gain a tax advantage.
In addition to the $520 million demand, the government has levied $81 million in fines on seven Samsung employees, bringing the total tax-related exposure to $601 million, equivalent to more than 60% of Samsung India’s $955 million net profit in 2023.
Samsung further claims that the January tax order was issued in haste and without providing the company adequate opportunity to present its defence. The company asserts that the process lacked procedural fairness given the scale of financial exposure.
The case follows a similar legal challenge by Volkswagen, which is contesting a record $1.4 billion tax demand for alleged misclassification of component imports. Neither Samsung nor India’s tax department responded to Reuters’ requests for comment, and Reliance Jio has also remained silent on the matter.
