Samsung Hit With Over $60 Million Tax Penalty In India: Report

The Indian government has hit Samsung with a substantial tax demand , ordering the technology giant and seven of its executives to pay $601 million for alleged tariff evasion on telecommunications equipment, says a report by news agency Reuters.

The company is looking at legal options after the Centre raised the tax demand, IANS reported.

The penalty represents approximately 63 per cent of Samsung's net profit in India for the previous fiscal year, marking one of the largest tax assessments against a foreign tech firm in recent regulatory actions in the country.

According to a confidential customs order reviewed, the report added, Samsung stands accused of systematically misclassifying imported network components to avoid import tariffs ranging from 10 per cent to 20 per cent. The components were reportedly sold to Reliance Jio, the telecom network owned by billionaire Mukesh Ambani.

Sonal Bajaj, a customs commissioner stated that Samsung "violated" Indian legal protocols by "knowingly and intentionally presenting false documents" to customs authorities. The investigation concluded that the company had transgressed standard business ethics to maximise profits at the expense of government revenues.

The penalty breakdown includes Rs 44.6 billion ($520 million) in unpaid taxes and penalties, additional fines totalling $81 million against seven key executives, including the network division's vice president and chief financial officer.

Samsung has the option to challenge the order through tax tribunals or the court system. The company previously attempted to persuade tax authorities to drop the investigation, arguing that the components did not warrant tariffs and that its classification practices were long-established.