Here's why Samsung has come under the Indian govt's scanner


Indian Market
by 5paisa Research Team Last Updated: 2023-01-12T15:57:56+05:30

The Indian arm of South Korean electronics conglomerate Samsung is in the government’s crosshairs. 

The Directorate of Revenue Intelligence (DRI) has issued a show cause notice to Samsung India Electronics (SIEL), The Economic Times reported on January 12. 

The agency has asked the South Korea's Samsung Electronics why it should not recover the Rs 1,728.47 crore along with interest for alleged customs duty evasion, according to the report. The notice was issued by Nhava Sheva Customs earlier this week, it added.

So, what exactly is the issue here?

According to the report, the issue pertains to alleged misdeclaration and misclassification of remote radio head (RRH), a networking device, by Samsung India to avail undue exemption of basic customs duty. SIEL had hired PwC for classification of the network equipment, which is under scanner.

What more has the DRI notice said?

The DRI, in the notice, has also asked why a penalty should not be imposed against the senior management of the company. Reportedly, it has also issued the notice to PricewaterhouseCoopers Pvt Ltd (PwC) and an associate director, who was questioned during the probe. SIEL, PwC have 30 days to reply to notice.

What has Samsung said on the matter?

Samsung Electronics' Indian unit is reviewing a government notice related to a tax dispute, it said on Thursday. 

"This is a tax dispute involving interpretation of law. We are reviewing the notice and are exploring legal opinion," a Samsung India spokesperson said in an email according to a Reuters report, but did not give further details, including on specifics about the tax dispute.

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