Samsung is contesting a $520 million tax demand from Indian authorities, who allege that the company misclassified imports of critical telecom equipment between 2018 and 2021 to evade customs duties of 10–20%. The equipment in question, known as Remote Radio Heads, was imported from South Korea and Vietnam and sold to Reliance Jio, a major telecom operator in India. Tax officials claim this misclassification allowed Samsung to avoid significant tariffs, resulting in a hefty penalty, with an additional $81 million fine imposed on seven Samsung employees, pushing the total claim to $601 million.

In its 281-page appeal to the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in Mumbai, Samsung argues that Indian authorities were fully aware of the import practices, as Reliance had a "long-standing practice" of importing the same equipment in a similar manner without paying tariffs for three years until 2017. Samsung asserts that the classification method used was not unique to them and that the authorities never raised objections when Reliance followed the same process. The company discovered during the tax investigation that Reliance had received a warning from tax officials in 2017 about the import classification, but this information was not shared with Samsung, nor did officials question Samsung at the time.

Samsung has criticized the tax department for what it describes as a rushed process, claiming it was not given a fair opportunity to present its case despite the significant financial stakes involved. The company maintains that the authorities' actions were procedurally flawed and discriminatory, pointing to what it sees as selective enforcement of regulations. This case has raised concerns about regulatory uncertainty for foreign investors in India, especially as it follows a similar $1.4 billion tax dispute involving Volkswagen over component import classifications.

The dispute centres on whether Samsung’s import practices were consistent with established industry norms and whether the Indian tax authorities applied their rules evenly. Samsung’s defence hinges on the precedent set by Reliance’s earlier imports and the lack of prior enforcement, arguing that the government’s current stance undermines the rule of law and creates an unpredictable business environment for multinational firms operating in India.