Samsung has urged an Indian tribunal to scrap a $520 million tax demand over the alleged misclassification of imported telecom equipment, pointing out that Reliance had followed the same approach for years without facing penalties, according to legal documents reviewed by Reuters.

The South Korean tech giant, one of the biggest players in India’s smartphone and electronics market, becomes the latest multinational to push back against a hefty Indian tax claim.

Indian tax authorities in January accused Samsung of dodging import duties of 10–20% on critical mobile tower components, which the company supplied to Mukesh Ambani’s Reliance Jio between 2018 and 2021. Samsung countered in a 281-page appeal filed with the Customs Excise and Service Tax Appellate Tribunal in Mumbai, arguing that regulators were “fully aware” of the classification practice since Reliance had been importing the same part duty-free up until 2017.

Samsung says it only learned during the investigation that Reliance had been warned back in 2017 about the tax treatment—but Reliance never shared that warning with Samsung, nor had Indian authorities questioned Samsung’s imports at the time.

“The authorities were completely aware of Samsung’s classification, yet they never raised an objection,” the company stated in its April 17 filing. It also noted that Reliance Jio officials had kept Samsung in the dark about the prior tax warning.

Neither Samsung, Reliance, nor India’s tax department responded to requests for comment from Reuters. Details about Reliance’s 2017 warning remain undisclosed.

In addition to the $520 million tax bill, Indian authorities have slapped Samsung employees with fines totaling $81 million, pushing the total demand to $601 million—over half of Samsung India’s 2023 net profit of $955 million. It’s unclear whether the employees are individually contesting these penalties.

Samsung also criticized the January tax order as rushed and claimed it was denied a proper chance to defend itself in a case with enormous financial stakes.

At the heart of the dispute is the import of the “Remote Radio Head,” a small but crucial 4G telecom component that handles radio-frequency signals. Indian officials claim Samsung underreported the value of $784 million in imports from Korea and Vietnam between 2018 and 2021, aiming to maximize profit.

Investigators alleged that Samsung disregarded “all business ethics and industry standards” to cheat the Indian government, according to the January order.