South Korean multinational appliance and consumer electronics company Samsung has asked the Indian court to counteract India’s tax demand, according to a Reuters report.
The tax demand raised is for misclassifying networking gear imports. The company argued that authorities were aware of the practice as Reliance Industries Ltd. imported the same elements for years.
Earlier this year, Volkswagen India also reportedly sued the Indian Union to counteract the “incredibly enormous” tax demand of $1.4 billion, claiming that the question is inconsistent with the government’s import tax regulations.
In Samsung’s case, tax authorities in January asked Samsung to pay $520 million to avoid a 10-20% tariff from 2018 to 2021 by misclassifying the imports of major mobile tower equipment it sold to Telecom Giant Reliance JIO.
In a 281-page challenge at Mumbai’s Customs and Services Tax Appeal Court, Samsung criticized Indian authorities as “fully aware” of the business model, as Reliance had a “long-term practice” of importing the same equipment without paying customs duties for three years until 2017, Reuters reported.
The report also said it found that Samsung’s Indian forces had been warned about how to practice in 2017 during an Indian tax audit, but did not inform the Korean company about it.
