• Samsung contests a $520 million tax demand in India for alleged misclassification of imports.
• The company cites the established practice of Reliance in similar import scenarios.
• Indian authorities have also imposed an $81 million fine on Samsung employees, raising the total demand to $601 million.
• This case follows previous high-profile challenges against Indian tax authorities, including Volkswagen's lawsuit for $1.4 billion.

Samsung has requested an Indian tribunal to nullify a $520 million tax demand, claiming that it misclassified imports of networking gear. The company argues that Indian tax authorities were aware of the practice, pointing to the example of India's Reliance Industries, which imported the same components under similar terms for years. This legal challenge positions Samsung as the second major foreign firm in recent months to contest tax demands in India, following Volkswagen's lawsuit for a record $1.4 billion relating to similar issues, according to Reuters, Dawn, and Times of India.

Tax authorities imposed the demand in January, claiming Samsung evaded 10-20% tariffs by misclassifying imports of a crucial mobile tower component sold to Reliance Jio from 2018 to 2021. Samsung’s legal filing, a detailed 281-page document before the Customs Excise and Service Tax Appellate Tribunal in Mumbai, accuses Indian officials of being "fully aware" of Reliance's longstanding practice of tariff-free imports prior to 2017. Samsung asserts that officials failed to challenge its classification of goods despite their awareness, according to Reuters, Dawn, and Times of India.

Additionally, the tax demand includes an $81 million fine imposed on seven of Samsung's employees, bringing the total financial implications to $601 million. The demand represents a significant portion of Samsung's net profit in India, reported at $955 million for the previous year. Samsung contends that it has not been afforded a fair opportunity to present its case during the tax assessment process, with allegations of the authorities moving too quickly in their decisions, according to Reuters, Dawn, and Times of India.