LG Electronics India Ltd has received a show-cause notice from customs authorities proposing recovery of ₹153.58 crore in customs duty over allegations that certain royalty payments were not included in the assessable value of imported goods.
The notice follows an investigation by the Directorate of Revenue Intelligence (DRI). According to the allegations, the omission of royalty payments resulted in a short-payment of customs duty. LG Electronics India disclosed the matter through a regulatory filing and said it is reviewing the notice and will submit its response within the prescribed timeline.
Customs Notice Issued at Nhava Sheva
The show-cause notice was issued on September 22 by the Office of the Commissioner of Customs at Jawaharlal Nehru Customs House, Nhava Sheva, and was received by the company on September 24.
The dispute concerns the valuation of imported goods for customs purposes. Authorities have alleged that certain royalty payments connected with the imports should have formed part of the assessable value used to calculate customs duty.
LG Electronics India, however, has stated that it believes it has appropriately paid the applicable customs duties and complied with the Customs Act and relevant rules. The company is expected to present its position during the proceedings.
Separate Scrutiny of OLED Imports
LG Electronics India is also facing a separate customs-related matter involving imported OLED glass screens from South Korea.
In that case, authorities are examining the applicability of a concessional 5% customs duty rate and whether OLED components should instead attract a 15% rate. The OLED matter is separate from the newly disclosed ₹153.58 crore show-cause notice concerning royalty payments.
According to reports, LG Electronics has responded to questions from authorities regarding the OLED imports and voluntarily deposited an amount toward the additional duty estimated by officials.
LG Electronics India Reports Higher Quarterly Profit
The customs notice comes alongside a period of stronger financial performance for LG Electronics India. The company reported a 27.2% year-on-year increase in net profit to ₹653 crore for the April-June quarter of FY2026-27, compared with ₹513 crore in the corresponding quarter a year earlier.
Revenue during the quarter increased 15.5% to ₹7,233 crore from ₹6,262 crore in the same period of the previous financial year.
Final Customs Liability Has Not Yet Been Determined
A show-cause notice represents the beginning of an adjudication process and does not, by itself, establish a final customs liability of ₹153.58 crore. LG Electronics India has the opportunity to respond to the allegations and present supporting arguments and records.
The final outcome will depend on the company's response, the customs proceedings and the decision of the competent authority. Businesses involved in international imports can also face complex valuation and compliance requirements, making [Import Duty Support] relevant where customs-related assistance is required.
The case will now proceed under the applicable customs law, with the final financial impact dependent on the outcome of the proceedings.