Korean Media: India Takes Another Step — Samsung and LG Allegedly Evading Tariffs Under Investigation!
On September 30, South Korean media outlet NewsPim reported that Samsung Electronics and LG Electronics are under investigation by Indian tax authorities over allegations of underpaying import tariffs on high-end television display components. The substantial investments these two major South Korean firms have made in the premium entertainment equipment market have now become focal points of scrutiny.
According to sources familiar with the matter, India’s Directorate of Revenue Intelligence (DRI), a wing of the Ministry of Finance, is probing claims that Samsung and LG paid only a 5% tariff on imported display components used in manufacturing OLED panels, instead of the standard 15% rate.
The sources said DRI officials visited Samsung Electronics’ headquarters in Gurugram, near New Delhi, in recent weeks and conducted interviews with relevant personnel. LG Electronics has also received written inquiries from Indian authorities regarding its OLED imports and has submitted responses.
Indian authorities argue that the preferential 5% tariff applied to these South Korean companies is unjustified. They maintain that the lower rate was intended for traditional LCD and LED products, which have long dominated the mass market, while OLED components should be subject to the higher 15% tariff.
Conversely, Samsung and LG contend they find the Indian authorities’ position difficult to accept. They assert that OLED technology represents an evolution of LED rather than a fundamentally different product category, and thus should be treated equally under tariff regulations.
The financial implications of imposing a 15% tariff remain unclear. Typically, Indian tax authorities issue assessment notices following investigations and may impose penalties up to 100% of the evaded amount. Should companies dispute the findings, legal recourse through the courts remains available.
In a statement provided to Reuters, Samsung stated: “We are reviewing the matter and will fully cooperate with relevant authorities.” The statement added: “We remain committed to complying with all applicable laws.”
LG Electronics and Indian tax authorities have not responded to requests for comment.
Prolonged import tariff and tax investigations are widely seen as among the most significant challenges foreign investors face in India. Samsung previously underwent a tax audit related to alleged tariff evasion on imported telecommunications equipment. Volkswagen, Kia, and BYD have also encountered disputes with Indian authorities over suspected tax avoidance.
Original source: toutiao.com/article/1877718294453248/
Disclaimer: This article reflects the personal views of the author.