LG Electronics India Ltd has received a show-cause notice from customs authorities seeking recovery of ₹153.58 crore in customs duty.
The department has alleged that the company did not include certain related royalty payments in the assessable value of some imported goods. The company disclosed the receipt of the notice in a filing with the stock exchanges.
The notice was issued following an investigation by the Directorate of Revenue Intelligence (DRI). The investigation alleged that royalty payments linked to certain imported goods were not included in the assessable value used for calculating customs duty. Based on the findings, customs authorities have raised a demand for additional duty.
Notice issued on September 22
The notice was issued on September 22 by the office of the Commissioner of Customs at Nhava Sheva Port in Navi Mumbai. The company received it on September 24. LG Electronics India will now have an opportunity to respond to the allegations and present its position on the customs department’s demand.
Under the customs valuation framework, the assessable value of imported goods forms the basis for calculating the applicable customs duty. If additional payments linked to an import, including royalty or other charges, are required to be treated as part of the value of the goods but were not included in the declared value, customs authorities can seek payment of additional duty.
In this case, customs authorities have raised objections concerning royalty payments based on the DRI investigation. However, the allegations contained in a show-cause notice do not by themselves constitute a final determination of tax liability. The final outcome will depend on the company’s response, the proceedings and the decision taken by the competent authority.
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Separate scrutiny over OLED imports
LG Electronics India is also facing scrutiny in a separate matter concerning the alleged incorrect benefit of a concessional 5 per cent customs duty on imported OLED glass screens in connection with imports from South Korea.
The dispute in that matter relates to the classification of OLED components and the customs duty rate applicable to them. Authorities are examining whether the 5 per cent concessional rate is linked to provisions covering older LCD and LED components used in mass-market products. They are also examining whether a 15 per cent customs duty should apply to OLED components.
LG Electronics has responded to questions from authorities concerning the OLED imports. The company has also voluntarily deposited an amount towards the estimated difference in additional customs duty indicated by the authorities. The OLED import matter is separate from the latest ₹153.58 crore show-cause notice.
Profit rises 27.2 per cent
Meanwhile, LG Electronics India reported a 27.2 per cent increase in net profit to ₹653 crore in the first quarter of financial year 2026-27. The company had reported a net profit of ₹513 crore in the corresponding quarter of the previous financial year.
Revenue for the April-June quarter also increased 15.5 per cent to ₹7,233 crore, compared with ₹6,262 crore in the same period a year earlier.
The latest customs case has emerged in the context of the company’s imports of components and products. Further proceedings on the ₹153.58 crore demand will now take place under the applicable customs law.
The issuance of a show-cause notice does not mean that a final liability of ₹153.58 crore has been established against the company. LG Electronics India has the right to respond to the allegations and present its case. Any final liability will depend on the outcome of the proceedings and the applicable legal process.
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