Samsung Fight $ 520 million Fiscal Demand of India, point to confidence practice

By Aditya Kalra and Arpan Chaturvedi

New Delhi (Reuters) -Samsung has asked an Indian court to cancel $ 520 million tax demand for allegedly classifying importance imports of network imports, according to civil servants who were aware of the practice, as India’s confidence imported the same component in a similar way for years, showing documents.

Samsung becomes the second major foreign company in recent months to challenge an Indian tax demand.

Volkswagen has sued the government of Prime Minister Narendra Modi in court for a record demand of $ 1.4 billion to erroneously classify their imports from components.

In the case Samsung, the fiscal authorities in January asked Samsung to pay $ 520 million to evade 10-20% rates through the erroneous classification of imports from a key mobile tower team, which was later sold to the telecommunications giant of the billionaire Mukesh Ambani, Reliance Jio, from 2018 to 2021.

In his 281 -page challenge in the Tax Appeal and Custom Service Services Appeal in Mumbai, Samsung criticizes the Indian authorities for being “fully aware” of the business model, as Reliance had a “ long -term practice ” of importing the same team without any fare payment for three years until 2017.

Samsung’s Indian unit says he discovered during an Indian fiscal investigation that confidence had been warned about 2017, but Reliance did not inform the southern company -Coreana and tax officials never questioned Samsung.

“The classification taken by the appellant (Samsung) was known by the authorities, although the same was not interrogated … Department was fully aware,” says Samsung in his presentation on April 17, which is not public, but was viewed by Reuters.

“Reliance Jio officials did not report” Samsung on the 2017 fiscal warning, he adds.

Samsung’s fiscal authority and India did not respond to Reuters consultations.

More details of the 2017 Reliance Notice by the tax authorities are not public and did not disseminate to the presentation of Samsung. Reliance did not respond to Reuters consultations.

In addition to $ 520 million samsung, the Indian authorities have also imposed a fine of $ 81 million to seven of their employees, reaching total tax demand at $ 601 million. It is unclear if Samsung employees separately challenge fines.

Tax demand represents a substantial part of last year’s net profit of $ 955 million for Samsung in India, where he is one of the largest actors in the electronics market and smart consumption phones.

In defending his tariff statements, Samsung also argues that the fiscal authority approved the order in January “in a hurry” and was not provided “a just opportunity” to present his case, despite the “huge bets” involved.