Earlier this year, the Indian tax authority demanded a $520 million customs tax from Samsung India for allegedly misclassifying imports of networking gear. But the Korean firm says the tax authority rushed the decision and did not give it a fair chance to explain its side. It has now reportedly filed the petition with the Customs Excise & Service Tax Appellate Tribunal (CESTAT) to challenge the penalty.
Samsung is challenging a $520 million tax demand
In January 2025, tax authorities asked Samsung India to pay $520 million for evading the 10-20% tariffs by misclassifying imports of a key mobile tower equipment. The company sold this equipment to Mukesh Ambani’s Reliance Jio between 2018 and 2021.
Samsung is not happy with the penalty and has decided to challenge it. According to Reuters, Samsung has filed the petition with a 281-page document at the CESTAT in Mumbai. Samsung criticises Indian tax authorities, saying that they are “fully aware” of the business model, as Reliance had a “long-established practice” of importing the same equipment without any tariff payments for three years until 2017.
Samsung’s India unit claims that during a tax investigation, it found Reliance was warned about the practice back in 2017. However, Reliance did not inform Samsung, and the tax authorities never questioned the company. In its filing, Samsung says via Reuters, “The classification adopted by the appellant (Samsung) was known to the authorities, however the same was never questioned … Department was fully aware.”
The equipment in question is a Remote Radio Head
In case you are unaware, the case is about Samsung importing a component called “Remote Radio Head”, one of the most important parts of 4G telecoms systems. Tax officials say Samsung misclassified the component’s imports worth $784 million from Korea and Vietnam between 2018 and 2021 to make more money.
In January, 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.”
It is worth mentioning that Indian authorities have also imposed an $81 million fine on seven of its employees, in addition to the $520 million penalty. As a result, the total tax demand to Samsung India is $601 million. As of now, it is unclear whether the employees plan to challenge the fines independently. The hearing may soon take place before a CESTAT bench, and we will let you know the outcome of the challenges.
