Exclusive-LG, Samsung face India tariff evasion investigation over OLED TV parts

India is investigating LG Electronics and Samsung for allegedly underpaying tariffs on imported display parts for high-end OLED TVs. Both South Korean companies have invested heavily in the Indian market, with OLED technology offering superior picture quality. The investigation concerns imports of display parts used in making OLED panels, which are produced by LG Electronics and Samsung in India.

The market for OLED TVs is still niche globally, with only 6.5 million units sold last year. Indian officials claim the companies wrongly claimed a lower 5% tariff on OLED glass screens labeled open cells, arguing that the rate is reserved for older LCD and LED technology, which dominate mass-market sales. The Directorate of Revenue Intelligence believes Samsung and LG should have paid a 15% duty on OLED parts.

The companies are challenging the Indian authorities' position, claiming OLED is just an advanced form of LED technology and should be subject to the same tariffs. If found guilty, the companies could face tax demand notices and penalties of up to 100% of the evaded duty, which can be legally challenged in court. Samsung stated it is reviewing the matter and cooperating with the authorities, while LG has submitted responses to the Indian authorities.

The investigation has also led to industry groups lobbying for the government to recommend OLED display parts be covered under the 5% concessional duty regime, as they claim the current law restricts benefits to LCD and LED parts, creating an anomalous situation and hindering the growth of OLED technology in India.