LG Electronics and Samsung are facing an investigation in India over claims that they paid lower import duties on parts used to make high-end OLED TVs. The investigation is looking at OLED display parts brought into India by the two companies, according to five sources cited by Reuters. Both LG Electronics and Samsung make OLED televisions in the country. Indian authorities believe the companies used a lower 5 per cent import duty rate meant for LCD and LED display parts when importing OLED glass screens, also called open cells. The Directorate of Revenue Intelligence (DRI) reportedly believes these OLED parts should instead have been charged a 15 per cent import duty. Here’s everything you need to know.
According to a new report from Reuters, Samsung and LG are being alleged to be evading taxes in the country. The authorities are currently investigating the matter, which focuses on OLED open cells imported for making television panels.
The Indian officials believe that Samsung and LG wrongly applied the 5 per cent tariff rate which is used for LCD and LED parts, while they should have been charged the 15 per cent tariff which is applied to the OLED components.
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The report also claims that both the companies disagree with this view and that, according to them, OLED is an advanced form of LED technology and that the same tariff treatment should apply.
Samsung has also told Reuters that it is reviewing the matter and cooperating with the authorities. LG and the Directorate of Revenue Intelligence have not yet commented on the matter.
Indian authorities have taken different steps in the two cases, as the DRI officials reportedly visited Samsung’s India headquarters in Gurugram to question company officials.
Whereas, LG reportedly received written questions about its OLED imports and has already submitted its responses. Moreover, the company has also made a voluntary, unspecified payment to cover any additional duty that authorities may eventually seek.
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At the time of writing, the financial impact of the investigation is not known. However, if the authorities determine that the duties were underpaid, then they can issue a tax notice and impose penalties of up to 100 per cent of the allegedly unpaid duty. The companies, on the other hand, have the right to challenge that decision in court.