LG Electronics India Concludes Advance Pricing Agreement with CBDT, Contingent Tax Liabilities Nil
LG Electronics India concluded an Advance Pricing Agreement with CBDT on January 5, 2026, for the period April 1, 2014, to March 31, 2023. This agreement eliminates contingent liabilities of ₹1,724.38 million for direct taxes and ₹3,153.00 million for royalty payments. A net tax expense of ₹177.12 million and a payment of ₹38.59 million to the promoter are expected.
The impact is medium as it resolves past tax uncertainties and clarifies future tax expenses, but it also involves a net tax expense and a payment to the promoter.
The conclusion of the Advance Pricing Agreement is positive as it eliminates significant contingent liabilities related to direct taxes and royalty payments, providing greater certainty on tax matters.
LG Electronics India Limited (LGEIL) has announced the conclusion of an Advance Pricing Agreement (APA) with the Central Board of Direct Taxes (CBDT) on January 05, 2026. The company had initially filed its APA application on March 29, 2018, seeking an agreement for a period of nine years, covering April 1, 2014, to March 31, 2023.
Following the signing of the APA, LGEIL anticipates significant financial implications. Contingent liabilities amounting to ₹1,724.38 million (approximately ₹172.44 crore) related to direct taxes will be eliminated. Additionally, a contingency amount of ₹3,153.00 million (approximately ₹315.30 crore) pertaining to royalty payments to its promoter, LG Electronics Inc., Korea, will also become nil.
The company will incur a net tax expense of ₹177.12 million (approximately ₹17.71 crore), exclusive of applicable interest which will be calculated based on the payment date. Furthermore, LGEIL is required to pay a net amount of ₹38.59 million (approximately ₹3.86 crore) to LG Electronics Inc., Korea, in accordance with secondary adjustment provisions under India's transfer pricing laws.
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LG Electronics India Limited filed this with the NSE as a statutory disclosure, categorised under other regulatory filings. It is a primary document, not a recommendation, and the desk marks it medium impact: worth reading, rarely worth acting on by itself.
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