Samsung pays Rs 300 cr to DRI over alleged duty evasion

Samsung Electronics has paid Rs 300 crore as customs duty to the Directorate of Revenue Intelligence (DRI) after it found that the company had evaded duty on import of 4G radio equipment. Following an investigation, the DRI charged the company Rs 500 crore for wrongly classifying the 4G radio equipment as zero-duty category.

The company made the payment on Wednesday and the balance would be paid in the due course of the investigation, said a source to The Economic Times. Samsung is yet to officially comment on the development.

In early July, DRI officials had carried out searches at Samsung offices in Gurugram and Mumbai over suspected evasion of import duty. The searches were conducted as the officials believed that Samsung routed equipment made in a non-FTA (free trade agreement) country through South Korea or Vietnam, which are FTA countries. Under the FTA route, the company enjoys zero duty on import of equipment manufactured in home base and Vietnam, unlike companies such as Nokia, Huawei, Ericsson that pay 20 per cent duty.

The investigation subsequently found that the company imported the equipment and claimed an exemption notification that’s not applicable to the equipment, making them liable to pay 20 per cent duty.

People in the know told the daily that other companies that were importing the same equipment were paying 20 per cent duty. The agency then asked Samsung to pay up the duties applicable.

Samsung is the largest 4G vendor in terms of volume in the country. The 4G remote radio head equipment is used for transmission and conversion of 4G airwaves.

Also read: DRI carries out searches at Samsung offices over suspicion of customs duty evasion