Samsung India executives challenge $81 million tax penalty, call charges unfair and excessive
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Seven senior executives of Samsung India are seeking legal relief to overturn hefty tax penalties imposed by Indian authorities, arguing the sanctions are excessive and based on a misinterpretation of trade rules rather than any intentional wrongdoing.
The case stems from a broader $601 million (approximately Rs. 5,135 crore) tax demand issued by Indian authorities in January.
The government accused Samsung of misclassifying imported mobile tower equipment between 2018 and 2021 to evade tariffs. While Samsung's India operations were hit with a $520 million (around Rs. 4,443 crore) bill, individual executives were penalised an additional $81 million (roughly Rs. 692 crore) for allegedly playing a “knowing and intentional” role in the misclassification.
In a High Court filing in Mumbai — not made public but reviewed by Reuters — Ravi Chadha, Samsung India's logistics executive, stated the penalty was levied just two to three days after authorities received detailed responses from the company and its staff. Chadha claims the process was hastily executed, lacking the due diligence necessary for such a significant decision.
"This timeframe is utterly insufficient to conduct the requisite in-depth study," Chadha said in the court filing, stressing that the case is centered around tariff interpretation and that "no grave offence has been committed."
Chadha, who faces an individual fine of Rs. 95 crore ($11.1 million), also highlighted the unfeasibility of the penalty, stating it is "egregiously exorbitant" and would take more than a century to repay given his current income.
Six other Samsung executives have also filed similar petitions, including network division vice president Sung Beam Hong, finance general manager Sheetal Jain, and indirect taxes general manager Nikhil Aggarwal.
According to a source familiar with the matter, all seven executives are being represented by the law firm Lakshmikumaran & Sridharan, which is also handling Samsung's appeal before a tax tribunal.
India's tax authority is yet to issue a statement on the matter.
