Directorate of Revenue Intelligence (DRI) officials reportedly carried out searches at Samsung offices over suspected evasion of duty on imports of network equipment. The searches began at the Delhi and Mumbai offices of the South Korean firm on Wednesday. The findings of the DRI are yet not confirmed.
The DRI officials visited the Mumbai office first as the networking operations are mainly there and also the Gurugram office since it is the company’s regional headquarters, stated a report in The Economic Times.
According to the daily, officials checked documents related to imports that were provided by Samsung. The DRI officials will ascertain if there were evasions of customs duty and if so whether it was malafide.
Samsung Electronics is yet to make a statement.
The company is the largest 4G vendor in the country in terms of volume. It is also an exclusive 4G equipment provider to Reliance Jio Infocomm.
Under the free trade agreement (FTA) route, the company enjoys zero duty on import of telecom products manufactured in its home base and Vietnam, unlike companies like Ericsson, Nokia, Huawei and ZTA that pay 20 per cent duty.
A person in the know told the daily that the government received intel that the equipment was actually made in a non-FTA country and was routed through South Korea or Vietnam. This would make the equipment liable for duty.
Most South Korean network gear suppliers enjoy duty-free status under the free trade pact between the two countries. The countries are signatories to a memorandum of understanding that aims to develop cooperation between the two nations to develop, modernise and expand telecom services and next-gen wireless networks.
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