New Delhi: Indian officials are probing the possibility that hefty OLED television makers like LG Electronics and Samsung paid too little in import duties on some vital parts, Reuters reported, quoting five sources close to the investigation.
The glass display panels (also known as “open cells”) used for making OLED TVs are the focus of the probe. The authorities claim the two South Korean firms brought them in under a concessional 5% tariff which only previously applied to older LCD and LED display components that make up the bulk of mass-market TV sales. The Directorate of Revenue Intelligence reckons OLED components should be subjected to 15% duty, two of the said sources said.
The companies don’t share that opinion. They say that OLED is the latest in LED technology and deserve the same tariff treatment on this basis. However, the sources, who spoke on the condition of anonymity due to the sensitive nature of the topic, did not reveal the extent of the lack of payment for duty.
Samsung stated it was looking into the issue, was cooperating with the authorities and was making sure it abides by all laws. Both LG and the revenue directorate declined to comment.
According to four sources, revenue officers went to Samsung’s India headquarters in Gurugram to question officials in the past few weeks. Instead, LG was sent a series of written requests questioning its OLED imports. It has responded and made a voluntary deposit of an unspecified amount to pay any additional duty to be charged, one source said.
If the case proceeds, the authorities are entitled to send out tax demand letters and fines of up to 100% of the amount of duty avoided. Businesses can take action in court to oppose such demands.
Both firms have a lot at stake. It was listed in Mumbai exchanges last year by LG and as of now has along with its Indian arm a market cap. of $12 billion. The company stated that its market share in the Indian TV market during August was around 26% and it accounted for nearly 59% of OLED TV market value in India. OLED sets are also available from Samsung in India which includes the indigenous 65-inch screen priced at $2,415. It is already challenging a $520m tax demand based on the classification of imported networking equipment.
OLED is still a minor market. Data from Omdia indicates 6.5 million were sold around the world last year and Counterpoint Research estimates they account for nearly 4% of the Indian $4.7 billion TV market.
It has also become a question for lobbying because of the tariff. In August, industry associations, namely CEAMA and MAIT, submitted almost identical confidential letters to the IT ministry in a bid for the 5% rate to be accorded to the OLED display parts. They said the tariff law applies only to LCD and LED parts, thus affecting the more sophisticated TV makers with higher costs and less competitiveness. They also wanted broader exemptions for OLED manufacturing equipment as only the old LCD machinery is currently eligible which they said would work to the detriment of the “Make in India” initiative.
Imports of displays, such as parts for television sets, increased by 15% to $5.6 billion in the year until March 2026, reflecting India’s dependence on imports.
Foreign investors have long been complaining about the time-consuming tariff and tax queries of India, but Indian officials argue that it is merely the law of the land.
