Samsung, the leading smartphone brand in India, is at risk of losing tax benefits for the financial year 2021. Under the Indian government’s Production-Linked Incentive (PLI) scheme, smartphone manufacturers can receive tax benefits by producing devices locally and investing capital in the country.
Rectifying Invoicing Problems: Samsung is Working to Resolve the Issue
According to a report by The Economic Times, Samsung may have to forgo tax benefits for the initial year of the PLI scheme due to discrepancies in its invoicing process. The South Korean company has acknowledged the issue and is currently engaged in advanced discussions with the Indian government to resolve the matter. In its claim for incentives, Samsung reported a total of INR 9 billion (approximately $108 million) based on achieving INR 150 billion (around $1.81 billion) worth of additional sales in FY21 compared to the previous year.
To qualify for these incentives, Samsung needed to manufacture phones with a factory cost of approximately INR 15,000 ($200). However, the Ministry of Electronics and Information Technology (MeitY) discovered inconsistencies in Samsung’s invoices, resulting in the temporary withholding of payment by officials.
A government official familiar with the situation has confirmed that Samsung has rectified the invoicing issue, ensuring the accuracy of its invoices. However, the official indicated that the tax benefits for the first year may be irretrievable, implying that Samsung may not receive the eligible incentives. Nevertheless, the company remains eligible for tax benefits for the financial year 2022. In contrast, other manufacturers such as Foxconn and Wistron have already received their tax incentives from the Indian government.
RELATED:
- A Significant Shift in Loyalty: Americans Now Prefer Samsung to Apple
- Samsung Galaxy Watch 6 series receives FCC certification
- Samsung addresses camera blur issue on Galaxy S23 and S23+, working on fix
- Realme GT Neo5 vs POCO F5 Pro: Specs Comparison
