LG Electronics India gets ₹153.58 crore customs duty notice over royalty payments
Synopsis
LG Electronics India faces a ₹153.58 crore customs duty demand over alleged royalty exclusions — and that is only part of the story. The company is simultaneously under DRI scrutiny alongside Samsung for reportedly underpaying duty on OLED screen imports, even as it posts a 27.2 per cent profit surge. The twin investigations signal a sharper regulatory lens on how multinationals classify and value electronics components at Indian ports.
Key Takeaways
LG Electronics India received a show cause notice on 24 September 2025 demanding ₹153.58 crore in customs duty.
The notice, dated 22 September 2025 , was issued by the Commissioner of Customs, Nhava Sheva Port , following a DRI investigation.
The allegation: royalty payments were not included in the assessable value of certain imported goods.
Separately, both LG and Samsung are under investigation for allegedly claiming a concessional 5% duty on OLED screens instead of the applicable 15% .
LG has reportedly submitted responses and voluntarily deposited the OLED duty difference estimated by officials.
Despite regulatory pressures, the company's Q1 FY2026-27 net profit rose 27.2% YoY to ₹653 crore on revenue of ₹7,233 crore .
LG Electronics India Ltd has received a show cause notice from customs authorities demanding recovery of ₹153.58 crore in customs duty, the company disclosed in a stock exchange filing. The notice alleges that the company failed to include royalty payments in the assessable value of certain imported goods.
Details of the Notice
The show cause notice, dated 22 September 2025, was issued by the Office of the Commissioner of Customs, Nhava Sheva Port in Navi Mumbai and was received by the company on 24 September 2025. The notice follows an investigation conducted by the Directorate of Revenue Intelligence (DRI), which alleged that royalty payments were not factored into the assessable value of certain imported goods — a basis on which customs duty is calculated.
Separate OLED Duty Investigation
This development comes alongside a separate, ongoing probe involving both LG Electronics and its South Korean rival Samsung over alleged wrongful claims of a concessional 5 per cent customs duty on imported OLED glass screens. The DRI has reportedly taken the position that the concessional rate applies to older LCD and LED panels used in mass-market products, and that OLED components should attract a higher duty of 15 per cent. LG Electronics is reported to have submitted written responses to the authorities regarding its OLED imports and has voluntarily deposited funds to cover the difference in customs duty as estimated by officials.
Company's Financial Performance
Despite the regulatory headwinds, LG Electronics India reported strong financial results for the first quarter of FY2026-27. Net profit surged 27.2 per cent year-on-year to ₹653 crore, compared with ₹513 crore in the same quarter of the previous financial year, driven by robust summer demand and premium product sales. Revenue for the April–June 2025 quarter rose 15.5 per cent to ₹7,233 crore, up from ₹6,262 crore a year earlier.
Broader Context
The DRI has in recent years intensified scrutiny of multinational consumer electronics companies over customs duty classification and valuation practices. The twin investigations into LG and Samsung reflect a wider regulatory focus on whether concessional import duty rates are being applied to components that authorities believe should attract standard or higher rates. The outcome of these proceedings could set precedents for how OLED component imports are classified across the industry. The company has not yet publicly indicated whether it plans to contest the latest show cause notice.
Point of View
But the more consequential story is the parallel OLED duty dispute involving both LG and Samsung. If the DRI's position — that OLED components attract 15 per cent rather than 5 per cent duty — is upheld, it could retroactively inflate import costs for the entire premium consumer electronics segment and invite similar notices across the industry. LG's decision to voluntarily deposit the estimated OLED duty difference is a pragmatic hedge, but it is not an admission of liability. Regulators and courts will need to settle the classification question definitively, and until they do, multinationals with high OLED import volumes face compounding compliance uncertainty.
NationPress
25 Sept 2026
Frequently Asked Questions
Why has LG Electronics India received a customs duty notice?
LG Electronics India received a ₹153.58 crore show cause notice from the Commissioner of Customs at Nhava Sheva Port, alleging that the company did not include royalty payments in the assessable value of certain imported goods. The notice follows an investigation by the Directorate of Revenue Intelligence (DRI) and was received by the company on 24 September 2025.
What is the separate OLED customs duty investigation involving LG and Samsung?
The DRI is separately investigating both LG Electronics and Samsung for allegedly claiming a concessional 5 per cent customs duty on imported OLED glass screens. Authorities have reportedly taken the position that OLED components should attract a 15 per cent duty, unlike older LCD and LED panels. LG has reportedly responded to the DRI's queries and voluntarily deposited the estimated duty difference.
Has LG Electronics India contested the customs notice?
The company has not publicly indicated whether it intends to contest the latest ₹153.58 crore show cause notice. In the related OLED investigation, LG has reportedly submitted written responses and voluntarily deposited funds covering the duty difference as estimated by authorities.
How is LG Electronics India performing financially despite these investigations?
LG Electronics India posted a 27.2 per cent year-on-year rise in net profit to ₹653 crore in Q1 FY2026-27, up from ₹513 crore in the same quarter a year earlier. Revenue for the April–June 2025 quarter grew 15.5 per cent to ₹7,233 crore, driven by strong summer demand and premium product sales.
What could the OLED duty ruling mean for the electronics industry?
If the DRI's classification — that OLED components attract 15 per cent rather than 5 per cent customs duty — is upheld, it could set a precedent affecting all consumer electronics companies importing OLED panels into India. This may increase import costs for premium televisions and smartphones, potentially influencing retail prices and supply chain decisions across the sector.
