LG Electronics India customs notice: Rs 153.58 cr in 2026

What the customs notice is about

LG Electronics India Limited has received a customs show-cause notice proposing recovery of Rs 153.58 crore. The notice relates to alleged non-inclusion of royalty payments in the assessable value of certain imported goods. Customs authorities have said the omission led to a short payment of customs duty. The company has said it is evaluating the matter and will submit a response within the prescribed timeline. The case matters because valuation disputes can materially affect landed costs and reported contingencies, especially when they involve royalty and related-party arrangements.

Who issued the notice and when

The show-cause notice is dated September 22, 2026. It was issued by the Office of Commissioner of Customs (NS-V) at Jawaharlal Nehru Customs House, Nhava Sheva. The development follows an investigation by the Directorate of Revenue Intelligence (DRI), according to the disclosure. At this stage, the notice is a proposal and not a final demand order. Any eventual duty liability, interest, or penalty would depend on adjudication.

Allegation: royalty not included in assessable value

The customs authority has alleged that LG Electronics India did not include royalty payments in the assessable value of certain imports. Under customs valuation principles, the assessable value can affect the amount of duty payable on imported goods. The authority’s contention is that excluding royalty from the value led to short payment of customs duty. LG Electronics India has not provided a quantified breakdown of the royalty component in the disclosure. The company has only stated that it is reviewing the matter and will respond to the appropriate authority.

Proposed amount and what is known on penalties

The proposed recovery amount cited is Rs 153,57,67,711, which is commonly presented as Rs 153.58 crore. Importantly, the disclosure notes that no penalty has been imposed at this stage. The company has stated that the financial impact will be determined upon adjudication of the notice. This means the figure remains a proposed recovery and not a confirmed liability. Any final outcome would typically follow submissions by the company and a formal adjudication process.

Key facts table

Wider regulatory context: DRI scrutiny and sector probes

The customs notice comes alongside broader scrutiny of electronics imports, particularly premium television components. Reuters reported on September 23, citing five sources, that India is investigating LG Electronics and Samsung for allegedly paying lower tariffs on imported display parts of high-end TVs. The report said the DRI is examining whether the companies underdeclared duties on imports of “open cell” display components used in making organic light-emitting diode (OLED) panels in India. The Reuters report also noted that, if allegations are confirmed, penalties could be up to 100% of the unpaid duties, on top of the duties themselves. Separately, a ScanX News comparison table referenced Samsung facing an issue related to alleged misclassification of OLED display parts, with the matter under review and cooperation stated, but with the amount not disclosed.

Recent tax and duty developments around LG Electronics India

LG Electronics India has had multiple tax and duty-related developments during 2026, based on the provided material. The company received a GST show-cause notice of Rs 116.72 crore dated May 26, 2026, linked to alleged excess input tax credit claims for FY 2021-22 based on differences between GSTR-9 and GSTR-3B. It later stated that GST authorities dropped the proposed demand through an order dated July 1, 2026, and that there would be no material impact following that order. The company also disclosed receiving a customs order dated January 29, 2026, demanding differential duty of about Rs 27.41 crore after voluntary payments, along with penalties totaling about Rs 46.70 crore. In another clarification dated January 20, 2026, LG Electronics India said no differential duty demand of Rs 119.15 crore had been raised against it by customs authorities.

Litigation and dispute resolution backdrop

In parallel to the regulatory notices, LG Electronics India has also reported outcomes in its favour in other proceedings. The material states that the company won a favourable order from the Income Tax Appellate Tribunal (ITAT) in Delhi, which deleted aggregate tax additions of roughly Rs 1,305 crore across five financial years ranging from 2014-15 to 2021-22. The ScanX News note also referenced a comprehensive 9-year Advance Pricing Agreement (APA) signed in January 2026. While details of the APA were not provided, APAs are typically used to bring certainty to transfer pricing outcomes over multiple years. Taken together, the notices and resolutions show that royalty, valuation, and tax positions remain a recurring focus area for the company’s compliance and dispute management.

What investors should watch next

The immediate next step is LG Electronics India’s submission of its response to the customs authority within the prescribed timeline. After that, the matter will move through adjudication, at which point any duty, interest, and penalty exposure will become clearer. Since the disclosure explicitly says no penalty has been imposed at this stage, the headline number should be read as a proposed recovery rather than a final determination. Investors will also track whether any parallel inquiries, including the Reuters-reported DRI probe into OLED-related import classifications, lead to separate proceedings or disclosures. Any further updates are likely to come through stock exchange filings or formal orders from authorities.

Conclusion

LG Electronics India’s Rs 153.58 crore customs show-cause notice centres on alleged exclusion of royalty payments from import valuation. The company says it is reviewing the matter and will respond within timelines, and the final financial impact will depend on adjudication. With multiple 2026 developments across customs, GST, and income tax, the next set of official orders and company filings will be key to understanding the eventual liability, if any.