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- Government slaps samsung with $ 601 million tax demand for telecom imports
New Delhi36 minutes ago
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The Government of India has sent a tax demand notice of $ 601 million, or Rs 5,150 crore to Samsung and its officers. This is the biggest tax demand notice ever sent to a company in recent years.
The government said in an order that Samsung and its officials used wrong methods to avoid tariffs on the import of Ki-Telicom Equipments. However, now the company and officers will have to pay previous tax and fine.
The company can challenge the order in a tax tribunal or court
The company can challenge this order of the government in a tax tribunal or court. This tax demand is a large part of Samsung’s last year’s $ 955 million, or a net profit of Rs 8,183 crore in India. Samsung is one of the largest companies in India’s consumer electronics and smartphone markets.
7 officers of the company were fined ₹ 693 crore
Samsung was ordered to pay $ 520 million (Rs 4,451 crore), including outstanding tax and 100% fine. Apart from this, seven officers of the company in India have been fined $ 81 million (Rs 693 crore).
These officers include Network Division’s Vice Chairman Sung Beam Hong, Chief Financial Officer Dong Won Chu, General Manager for Finance Sheetal Jain and General Manager Nikhil Aggarwal for the indirect tax of Samsung.
Import received warning in 2023 to make wrong classifying
- Samsung was warned in 2023 to incorrectly classify the import to avoid 10% or 20% tariffs on the essential transmission component used in mobile towers.
- The company imports telecom equipment through its network division. The company then imported these items and sold Bilinier Mukesh Ambani’s telecom giant Reliance Jio.
From 2018 to 2021, Samsung has not paid any arrears on the import of a value of Rs 6,711 crore from Korea and Vietnam.
Samsung pressures India’s tax authority to end the investigation
Samsung pressured India’s tax authority to abolish the investigation. The company then said that the component does not have a tariff and the authorities had known about its classification practice for years. However, the Customs Authority disagreed on the company’s statement on 8 January in one of its orders.
Samsung violated Indian laws: Commissioner of Customs
Commissioner of Customs Sonal Bajaj said that Samsung has violated Indian laws. Apart from this, the company has deliberately presented false documents to the Customs Authority for clearance. Investigators found that Samsung has violated all business ethics, industry practices and standards.
The company has complied with Indian laws: Samsung’s statement
Samsung said in a statement that the company has complied with Indian laws. At the same time, the company is assessing legal options to ensure safety of its rights.
Investigation started in 2021, company offices were searched
Samsung’s investigation began in 2021 when tax inspectors searched the company’s offices in Mumbai and New Delhi. Then tax inspectors also seized documents, emails and some electronic devices. After this, some top officials of the company were also questioned.
Did not pay dues on import of ₹ 6,711 crore from 2018 to 2021
Tax inspectors had found that from 2018 to 2021, Samsung has not paid any dues from Korea and Vietnam $ 784 million, or Rs 6,711 crore, to import a component of Rs 6,711 crore.
The government said that this component transmits on telecom towers transmit signal and tariffs. However, Samsung has disagreed on this.
(Tagstotranslate) Government slaps samsung with $ 601 million tax demand for telecom important