Samsung officials questioned by DRI over alleged duty evasion

The probe agency is learnt to have taken possession of multiple physical and digital records during a search operation conducted on the premises of the South Korean firm in Delhi and Mumbai this week.

The Directorate of Revenue Intelligence has questioned at least three senior executives of Samsung Electronics in connection with alleged customs duty evasion on imports of network equipment early this week, an official of the central agency told Business Standard.

The authorities are examining whether the South Korean firm misused the free-trade agreement (FTA) while importing these equipment to India. According to the pact India has with South Korea, network and mobile radio communication gear are duty-free.

The probe agency is learnt to have taken possession of multiple physical and digital records during a search operation conducted on the premises of the South Korean firm in Delhi and Mumbai this week, the official said.

Without divulging details in the matter, the official said, “The case is in preliminary stages where we are vetting various import-related documents. If required, the Samsung executives could be summoned for further details.”

Sources said if a breach in the free-trade pact was found, a showcause notice would be served on the company.

Samsung Electronics did not respond to queries.

DRI -- an investigative agency for custom-related matters -- has been keeping a close watch on imports of certain products from countries India has FTA with.

Last year, the government mandated that importers need to furnish proof of 35 per cent value additions in goods from the country of origin to claim duty concession under FTA. Sources said incidences of misuse of this facility had been rising over the past few years.

Earlier, an investigation found that TVs, mobiles, set-top boxes, telecom network products and metals from FTA countries did not meet the prescribed origin criterion. In 2019, the DRI had detected a large-scale fraud by which areca nuts from a non-FTA country was imported from an FTA partner, duly covered by incorrect certificates of origin.

Over the past five years, the customs authorities have detected fraudulent claims of Rs 1,200 crore.