In a significant legal victory for Samsung India, the Delhi High Court on Monday set aside a previous ruling by the Income Tax Appellate Tribunal (ITAT) that had dismissed the company’s plea against a Rs 1,213 crore tax demand for the assessment year 2021-22. The bench, consisting of Justice Vibhu Bakhru and Justice Swarna Kanta Sharma, directed the ITAT to reconsider Samsung’s application on its merits swiftly.
The ITAT had earlier rejected Samsung’s application on November 22, labeling it “premature” on the grounds that Samsung had not demonstrated any immediate recovery actions by tax authorities at the time of the application. The tribunal had stated that in the absence of an imminent threat, there was no basis for granting relief.
Challenging the ITAT’s decision, Samsung India approached the Delhi High Court, which overruled the tribunal’s verdict, providing temporary respite to the South Korean electronics giant from the substantial tax demand.
This legal development comes amid other challenges faced by Samsung in India, including a previous show-cause notice from the Directorate of Revenue Intelligence (DRI) in 2023. The notice accused the company of evading customs duties amounting to Rs 1,728 crore (approximately $212 million) by allegedly misclassifying networking equipment to benefit improperly from customs duty exemptions.
Further complicating matters for Samsung, the company is currently dealing with operational disruptions at its Chennai manufacturing facility, where a three-day workers’ strike has impacted the production of televisions, refrigerators, and washing machines.
Samsung also faces stiff competition in India’s fiercely competitive smartphone market. Once the market leader, Samsung has slipped to third place, trailing Chinese competitors Vivo and Xiaomi. According to market research firms Counterpoint and Canalys, Samsung held about 18% and 17% market share, respectively, during the April-June quarter, compared to Vivo and Xiaomi, each securing around 19%.
