LG Electronics India sees a credit rating action

The Show Cause Notice quantifies a customs-duty demand of Rs 153.58 crore (Rs 153,57,67,711). It does not specify a separate interest amount, and states that no penalty has been imposed at this stage. Therefore, the quantified amount currently specified in the notice is Rs 153.58 crore, comprising duty only. ^[1]

The amount reflected as a contingent liability in the Notes to Accounts of the most recent audited financial statements cannot be quantified from the cited filings. No audited Notes to Accounts figure is reported with this disclosure, so it cannot be established whether the full Rs 153.58 crore, a different amount, or no amount was recorded as a contingent liability. The company states that the financial impact will be determined upon adjudication. ^[1]

The Show Cause Notice does not specify an assessment period. Its regulatory disclosure records the applicable period as “NA”. The notice is dated 22 September 2026, was received on 24 September 2026, and alleges that royalty payments were excluded from the assessable value of certain imported goods; it proposes customs-duty recovery of Rs 153.57 crore. ^[1]

There is also no disclosed evidence that this is a recurring royalty-valuation dispute previously adjudicated or settled for earlier assessment years. The filing refers to a DRI investigation but does not identify prior-year proceedings, earlier orders, or any settlement concerning the same royalty issue. The matter remains at the show-cause stage; no penalty has been imposed and the company stated that its response would be submitted before adjudication. ^[1]

The earlier LG Electronics India matter reported for FY 2021-22 was a separate GST input-tax-credit reconciliation dispute, not a customs valuation dispute over royalty payments. That proposed GST demand was subsequently dropped in full. ^[2] Therefore, it should not be treated as evidence of a prior adjudication or settlement of the current customs royalty issue.

LG Electronics India’s stated position is compliance-based rather than a fully articulated legal submission on “transaction value”: it says it has appropriately paid the customs duties and complied with the Customs Act, 1962 and the relevant rules. It is reviewing the Show Cause Notice and intends to submit its response to the customs authority. The notice alleges that royalty payments should have been included in the assessable value of certain imported goods, resulting in alleged short-payment of customs duty. No penalty has been imposed at this stage. ^[1]

On prior proceedings, the cited company disclosure does not identify any earlier application for an advance ruling or any judicial stay concerning similar royalty-based customs valuation demands. The other judicial matter identified was LG’s challenge to a Rajasthan High Court entry-tax ruling; the Supreme Court permitted withdrawal of that challenge with liberty to seek a review before the High Court. That was an entry-tax dispute, not a royalty-in-imported-goods valuation case. ^[3]

A separate report refers to a January 2026 customs order involving alleged misuse of duty-exemption benefits on digital-signage imports, with LG reportedly intending to appeal; it concerns classification/exemption eligibility rather than royalty inclusion and does not establish that an advance ruling or stay was obtained. ^[4]

Bottom line: the present legal stance is that the company believes its customs payments were compliant, but its detailed statutory arguments on whether royalty forms part of transaction value are yet to be submitted. No prior royalty-specific advance ruling or judicial stay is identified in the cited record.