LG Electronics India Limited has received a significant GST demand order from tax authorities, highlighting ongoing compliance challenges in the goods and services tax regime. The company disclosed this development under regulatory requirements, providing detailed information about the nature and implications of the order.

GST Demand Order Details

The Joint Commissioner - Corporate Circle-2, Greater Noida issued an Order in Original dated March 10, 2026 in Form DRC-07 for the financial year 2019-20. The order was issued under Section 74 of Central Goods and Services Tax Act, 2017 and Uttar Pradesh Goods and Services Act, 2017 read with Section 20 of Integrated Goods and Services Tax Act, 2017.

Nature of Alleged Violation

The tax department has alleged that LG Electronics India claimed ineligible input tax credit on bus facility provided to employees for transportation purposes. According to the department's position:

• The credit claimed by the company is not obligatory
• It was not used for business purposes
• Such credit is blocked under section 17(5) of the GST Act

The dispute centers around employee transportation services, specifically pick and drop bus facilities, and whether input tax credit can be legitimately claimed on such expenses under GST provisions.

Company's Response and Next Steps

LG Electronics India has indicated it will file an appeal before the appellate authorities within the prescribed timelines. The company maintains its position that the input credit claimed is within the ambit of GST provisions and not barred under section 17(5) of the GST Act.

Financial and Operational Impact

The company has stated that there is no impact on financials, operations or other activities due to this order. This assessment is based on management's belief that the input credit claimed by the company is legitimate and within GST provisions. The company's confidence in its position suggests it expects a favorable outcome in the appellate process.

The disclosure was made pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, ensuring transparency with stakeholders about material developments affecting the company.

LG Electronics India Limited has issued a postal ballot notice seeking member approval for key corporate decisions through remote e-voting. The notice, dated February 11, 2026, outlines two ordinary resolutions requiring shareholder approval.

Director Re-appointment Proposal

The company seeks member approval for re-appointing Mr. Dongmyung Seo (DIN: 09481866) as Whole Time Director (designated as Executive Director) for a four-year term effective January 27, 2026. The Board of Directors approved his re-appointment on January 16, 2026, based on the Nomination and Remuneration Committee's recommendation.

The proposed remuneration package includes salary, allowances, and perquisites not exceeding ₹3,50,00,000 per annum, excluding tax components borne by the company. In the previous year 2025, the company paid him ₹2,95,63,612 excluding tax components. Additional benefits include leased accommodation, medical expenses, telephone facilities, chauffeur-driven car, and club membership for business purposes.

Material Related Party Transactions

The second resolution seeks approval for material related party transactions between LG Electronics India Limited and its promoter LG Electronics Inc. for an aggregate value up to ₹72,500 million during FY 2026-27.

The transactions represent 29.75% of the company's annual turnover for FY 2024-25, which was ₹243,667 million. Historical transaction values with LG Electronics Inc. were ₹38,027.09 million in FY 2024-25 and ₹28,953.10 million from April to December 2026.

Voting Schedule and Process

The company has engaged National Securities Depository Limited (NSDL) to provide remote e-voting facilities to members. The voting schedule is structured as follows:

The postal ballot notice has been sent electronically to members whose email addresses are registered with the company, registrar, or depositories as of the cut-off date. Mr. Neeraj Arora, Practising Company Secretary, has been appointed as the scrutinizer for the postal ballot process.

Regulatory Compliance

The Audit Committee has reviewed and approved the proposed related party transactions, confirming they are conducted at arm's length basis and in the ordinary course of business. The committee verified that transactions are not prejudicial to public shareholders' interests and terms are favorable compared to similar transactions with unrelated parties.

The company has provided detailed disclosures in accordance with SEBI circular requirements, including minimum information standards for related party transaction approvals. All material documents are available for electronic inspection during the voting period.

Source: None/Company/INE324D01010/2b52a7a7-6b78-43c5-914b-e3d9e75b8b79.pdf