LG Electronics India Receives Notice Proposing 21.7 Billion Won in Customs Duties; Alleged Failure to Declare Royalties

【NEW DELHI, India=Pragya Awasthi, correspondent】LG Electronics India has received a notice from Indian customs proposing the recovery of approximately 1.5358 billion rupees (about 21.7 billion won) in customs duties. The notice alleges that the company failed to include royalty payments in the dutiable value of imported goods.
According to local media reports on the 28th, LG Electronics India received a notice dated September 22 that was issued by the Jawaharlal Nehru Customs Commissionerate.
According to an investigation by the Directorate of Revenue Intelligence (DRI), customs authorities believe LG Electronics underpaid duties by omitting royalty payments when calculating the dutiable value of some imported goods. The proposed recovery amount is 1,535,767,711 rupees. However, no separate penalty has been imposed at this stage. The final financial liability will be determined through a review and adjudication process concerning the notice.
LG Electronics India said it is reviewing the matter and plans to submit a response to the relevant authorities within the prescribed deadline. However, the company maintains that it lawfully paid the full amount of customs duties in accordance with Indian customs law and related regulations.
The notice comes as Indian authorities tighten customs regulations on electronics imports. Earlier, authorities launched an investigation into Samsung Electronics and LG Electronics over their application of a lower 5% tariff rate to display components used in premium OLED TVs, arguing that a 15% tariff should apply. The latest notice, however, directly concerns whether royalties were included in the dutiable value of imported goods, rather than the tariff classification of OLED components. Samsung Electronics, which is also being investigated by Indian authorities alongside LG Electronics, said it is reviewing the matter and cooperating with the authorities to ensure compliance with applicable laws. Both companies import substantial amounts of display panels and related components to manufacture premium products.
The Indian government continues to strengthen customs controls on electronics and component imports to promote domestic manufacturing. As a result, the appropriateness of tariff rates and dutiable-value calculations for imported components has emerged as a major regulatory issue for global electronics companies.

[email protected] Pragya Awasthi, correspondent Reporter