New Delhi:
Samsung has asked an Indian tribunal to reduce the tax demand of $ 520 million to allegedly confuse the import of networking gear, arguing that the authorities knew about the practice as India’s dependence had imported the same ingredient in an equal manner for years, shows documents.
Samsung became the second major foreign company to challenge the demand for Indian tax in recent months.
Volkswagen has filed a case in the court to Prime Minister Narendra Modi’s government for a record demand of $ 1.4 billion to incorrect its component imports.
In the Samsung case, in January, the tax authorities asked Samsung to pay $ 520 million to develop 10-20% tariffs, blaming the import of a major mobile tower equipment, which was then sold to billionaire Mukesh Ambani’s telecommunication veteran, Reliance Jio from 2018 to 2021.
In the challenge of 281-pies in the Customs Excise and Services Tax Appellate Tribunal in Mumbai, Samsung criticized Indian officials, to be the “fully aware” of the business model as Reliance had a “long-established practice” to import equipment similar to any tariff payment for three years by 2017.
Samsung’s India Unit says it has been revealed during an Indian tax investigation that Reliance was warned about the method of practice in 2017, but Reliance did not inform the South Korean company about IT and the tax authorities never questioned Samsung.
Samsung said in the filing on 17 April, “The classification was known for the officers adopted by the appellant (Samsung), although the same was never questioned … the department was fully aware,” File on 17 April says Samsung says, which is not public, but was seen by Reuters.
“Reliance Jio officials did not inform” Samsung said about the 2017 tax warning, saying.
Samsung and India’s Tax Authority did not answer the questions of Reuters.
Reliance’s 2017 warning from tax authorities is not public and it was not disclosed in Samsung filing. Reliance did not respond to the Reuters Quarries.
For Samsung’s demand of $ 520 million, India has also fined its seven employees by $ 81 million, to a total tax demand to $ 601 million. It is not clear whether Samsung employees are challenging the fine separately or not.
Demand for Tax is a sufficient part of the net profit of last year’s 955 million dollars for Samsung in India, where it is one of the biggest players in the consumer electronics and smartphone markets.
In defending its tariff declarations, Samsung also argued in its filing that the tax authority passed the order “in a hurry” and despite the “huge bets”, it was not provided “a proper opportunity” to present its case.
The Samsung case worries about the import of a component called “remote radio head”, which is a radio-frequency circuit attached to a small outdoor module, which tax authorities say that “4G telecom system is one of the most important” parts of the system.
In the case against Samsung, it has been alleged that it incorrectly increases the import of $ 784 million from Korea and Vietnam between 2018 and Vietnam to maximize profits.
Investigators found that Samsung “transferred all professional morality and industry practices or standards to achieve its only purpose of maximizing its profit by cheating the government’s treasury and achieving its only purpose,” in the January order.
(Except for the headline, the story has not been edited by NDTV employees and is published by a syndicated feed.)
