The Indian government has ordered Samsung India to pay approximately $601 million in back taxes. The move comes after an investigation by the Directorate of Revenue Intelligence (DRI) into alleged tax evasion concerning misclassification of imports.
According to a Reuters report, the tax demand is connected to Samsung’s import of components used in the manufacturing of smartphones. The authorities believe the company incorrectly declared certain parts to benefit from lower import duties, which resulted in a significant revenue loss to the government.
A spokesperson for Samsung India stated that the company is reviewing the tax order. “We have received the order and are currently examining it. We are committed to complying with all applicable laws and regulations,” the company said in a brief statement.
The issue dates back to imports made by Samsung between 2017 and 2020. Investigators claim the company undervalued specific components such as printed circuit boards (PCBs) by not including the cost of certain software in the import value, which should have been considered under Indian customs law.
This is not the first time a major technology company has faced scrutiny from Indian tax authorities. In recent years, several global corporations have been asked to pay back taxes over various issues related to transfer pricing and import valuations.
Samsung is one of the largest smartphone makers in India and plays a significant role in the country's electronics manufacturing sector. The final outcome of this tax case could have broader implications for the tech industry and other multinational companies operating in India.
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