Samsung India is facing a major financial setback after being slapped with a staggering $601 million penalty for evading import tariffs on telecom equipment. The penalty includes $520 million in unpaid taxes, with an additional 100% fine imposed by Indian authorities. This enforcement action ranks among the most significant tax penalties in India’s recent history.
Adding to the financial blow, seven senior executives of Samsung India have also been penalized, with a collective fine of $81 million. Notable executives facing charges include Sung Beam Hong, Vice President of the Network Division; Dong Won Chu, Chief Financial Officer; Sheetal Jain, Finance General Manager; and Nikhil Aggarwal, Indirect Taxes General Manager.
Authorities claim that Samsung India misclassified key telecom components, specifically “Remote Radio Heads,” which are essential for 4G networks. The misclassification reportedly helped the company bypass import tariffs ranging between 10% and 20%. The disputed telecom parts, valued at $784 million, were imported from South Korea and Vietnam between 2018 and 2021 and were primarily supplied to Reliance Jio, owned by Mukesh Ambani.
Despite the controversy, Samsung India reported a strong financial year in 2024, with net profits reaching approximately $955 million. However, this hefty tax penalty could impact the company’s financial outlook and regulatory standing in India.
