Samsung Electronics was ordered to pay approximately 900 billion won in tax reassessment and penalty surcharges, claiming it evaded tariffs while importing telecommunications equipment to India.
According to Reuters on the 25th, Indian tax authorities determined that Samsung Electronics misclassified imported goods to evade tariffs of 10% or 20% when importing key telecommunications equipment. The item in question is a small radio frequency circuit module called 'remote radio head,' which is a core component for transmitting signals at 4G mobile communication base stations.
From 2018 to 2021, Samsung Electronics imported $784 million (approximately 1.15 trillion won) worth of these components from Korea and Vietnam without paying tariffs. Samsung Electronics submitted the results of evaluations from four experts, stating, “This component does not perform transmitter-receiver functions, so it is a duty-free item.”
However, the Indian government contended that Samsung Electronics defined this component as a 'transmitter-receiver' in a letter submitted to the government in 2020, claiming it was a 'tariff subject item.' Indian authorities imposed a total of 44.6 billion rupees (approximately 763.6 billion won) in unpaid tariff reassessments and penalty surcharges on Samsung Electronics. Additionally, a penalty surcharge of $81 million (approximately 118.9 billion won) was also imposed on executives of Samsung Electronics' Indian branch in connection with this case.
In response, Samsung Electronics noted, “This matter is an issue of customs classification interpretation,” and added, “We comply with Indian law and are reviewing legal responses.”