Display panels make up 60-70% of a TV's cost: a 10-point duty hike could push OLED television prices up by 6-7% overnight
NEW DELHI: India’s Directorate of Revenue Intelligence has opened a customs investigation into LG Electronics and Samsung Electronics over the tariff classification of imported OLED display panels used in premium television manufacturing, according to reports emerging in late September 2026. At the heart of the dispute is a single question with significant financial consequences: whether OLED, or organic light-emitting diode, display components qualify for the same concessional 5% import duty granted to older LCD and LED panels, or whether they must instead be taxed at the standard 15% rate.
The DRI’s position is straightforward. It argues that OLED technology, which relies on self-emissive organic compounds rather than a liquid crystal matrix or a traditional LED backlight, is technologically distinct from LCD and LED, and therefore falls outside the concessional exemption that explicitly names only those two technologies. LG and Samsung counter that OLED represents an evolutionary advance within the broader LED category, and that denying the concession penalises exactly the kind of technological progress India’s manufacturing policy is meant to encourage.
Where the Investigation Currently Stands
The probe has moved beyond preliminary inquiry into active fact-finding. DRI investigators visited Samsung’s India headquarters in Gurugram to question executives and supply-chain representatives directly, and the company has publicly stated it is reviewing the matter while cooperating fully with authorities. LG Electronics has responded through formal written questionnaires and submitted technical and legal justifications for its position. Notably, LG has also voluntarily posted a monetary deposit with customs authorities, a move often taken to limit potential interest liability while a matter remains under investigation. As of late September, no Show Cause Notice has been issued under Section 28 of the Customs Act, and the total quantum of alleged duty underpayment has not been made public.
A Tariff Structure Built for an Earlier Display Era
To understand why this distinction matters so much, it helps to trace how India’s tariff code has evolved. Display panels and open cells were once classified under older tariff codes before India introduced a dedicated line for television open cells in 2020, and later adopted a global standard heading, 8524, in 2022 specifically covering flat panel display modules. Alongside this, Notification No. 50/2017-Customs created a concessional duty structure to support domestic television assembly under the Make in India programme, explicitly granting the 5% rate to open cells used in manufacturing “Liquid Crystal Display (LCD) and Light Emitting Diode (LED) TV panels.” OLED, as a technology, did not exist in meaningful commercial form when much of this framework was designed, and the notification’s text has never been updated to explicitly mention it.
This textual gap matters enormously in Indian tax law because of a 2018 Supreme Court Constitution Bench ruling, Commissioner of Customs v. Dilip Kumar and Company, which established that tax exemption notifications must be read strictly, that the burden of proving eligibility for an exemption falls entirely on the importer, and that any ambiguity must be resolved in favour of the government rather than the taxpayer. Under this precedent, LG and Samsung’s argument that OLED is merely an advanced form of LED faces a genuinely difficult legal test, since courts and tribunals are barred from expanding an exemption’s scope through generous interpretation.
Why the Numbers Here Are Significant
The commercial stakes are considerable. Display panels typically account for 60% to 70% of a television’s total manufacturing cost, meaning a 10 percentage point tariff increase, from 5% to 15%, translates into roughly a 6% to 7% rise in the total landed cost of a finished OLED television. LG Electronics India holds an estimated 26% share of India’s overall TV market by value and a dominant 59% share of the domestic OLED segment specifically, giving it considerably more exposure to this dispute than most competitors. India’s total television and display part imports, meanwhile, reached $5.6 billion by March 2026, up 15% year-on-year, underlining just how much revenue is potentially at stake across the sector.
If the higher duty is upheld and applied retroactively, both companies could face demands covering past import declarations, plus statutory interest and penalties that can reach up to 100% of the duty evaded. Alternatively, if companies pass the cost onto consumers, retail prices for premium OLED televisions in India could rise meaningfully, potentially slowing adoption of the technology just as it gains traction domestically.
An Industry Pushing Back Through Policy Channels
Recognising the risk, industry bodies including the Consumer Electronics and Appliances Manufacturers Association and the Manufacturers’ Association for Information Technology submitted formal representations to the Ministry of Electronics and Information Technology in August 2026, urging the government to extend the 5% concessional rate explicitly to OLED open cells. Their argument centres on the risk of an “inverted duty” structure, where taxing advanced components more heavily than finished imported televisions actually discourages domestic assembly rather than supporting it, working against the stated goals of Make in India.
This is also not an isolated dispute for either company. Samsung is separately contesting a $520 million customs demand over the classification of imported networking equipment, while LG received a ₹116.7 crore GST show-cause notice in May 2026, suggesting Indian tax authorities are applying similarly rigorous scrutiny across multiple fronts of these companies’ Indian operations.
What Comes Next
Given the constraints imposed by the Dilip Kumar precedent, litigation alone is unlikely to offer LG and Samsung a durable solution; any lasting relief would most plausibly come through executive policy action from the CBIC or MeitY rather than tribunal rulings. Over the coming months, the clearest signals of how this resolves will come from whether formal Show Cause Notices are issued, whether the government responds to industry representations with a tariff clarification, and whether OLED television prices shift during India’s upcoming festive sales season, a period when both companies will be watching consumer response closely regardless of how the underlying tax dispute unfolds.
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