Samsung has been hit with a A$954 fine for avoiding taxes and what’s been described as “dodging” tariffs, the move follows an investigation of communication Companies operating in India.
The move by the Indian Government came following an extensive investigation of the South Korean Companies imports spanning communication gear, the fine is among one of the biggest ever imposed by the Indian Government.
Back in 2023 The Indian Ministry of Finance hit Chinese smartphone manufacturers, including Xiaomi, Vivo, and Oppo, after they were caught evading tariffs and illegally remittance of funds back to China totalling $980 million.
Indian tax authorities were only able to retrace 18% of the total amount evaded by these companies.
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This week Indian authorities ordered Samsung and its executives in the country to pay US$601 million (A$954M) in back taxes and penalties.
The demand represents a substantial chunk of last year’s net profit of $955 million for Samsung in India, where it is one of the largest players in the consumer electronics and smartphones market. It can be challenged in a tax tribunal, or the courts claims Reuters.
The company, which also imports telecoms equipment through its network division, received a warning in 2023 for misclassifying imports to evade tariffs of 10% or 20% on a critical transmission component used in mobile towers.
Samsung pushed India’s tax authority to drop the scrutiny, saying the component did not attract tariffs and officials had known its classification practice for years.
But customs authorities disagreed in a confidential January 8 order that is not public but was reviewed by Reuters.
Samsung “violated” Indian laws and “knowingly and intentionally presented false documents before the customs authority for clearance”, Sonal Bajaj, a commissioner of customs, said in the order.
Investigators found that Samsung “transgressed all business ethics and industry practices or standards in order to achieve their sole motive of maximising their profit by defrauding the government exchequer,” Bajaj added.
Seven India executives face fines of $81 million, among them the network division’s vice president, Sung Beam Hong, Chief Financial Officer Dong Won Chu and Sheetal Jain, a general manager for finance, as well as Nikhil Aggarwal, Samsung’s general manager for indirect taxes, the order showed.
