8 months ago
Delhi HC Upholds 15% Tax on LG's ICC Mark Payments
The Delhi High Court has decided that LG Electronics India must pay a 15% tax on part of the money it gave to use the ICC (International Cricket Council) trademark.
This payment was made 22 years ago, and the court agreed with the tax department that one-third of the $11 million was for using the trademark, which is considered a royalty.
The other two-thirds was for advertising.
LG tried to argue that the payment was not for royalty, but the court did not agree and upheld the tax.
The tax is allowed under an agreement between India and Singapore.
Delhi High Court dismissed LG Electronics India's petition to quash a 15% withholding tax on ICC mark payments.
The court upheld the Income Tax Department's classification of one-third of the $11 million payment as royalty, subject to 15% tax under the DTAA.
LG argued that the payment was for business income, not royalty, citing a previous case, but the court did not agree.
The Income Tax Department contended that ICC Marks, Event Marks, and Global Partner Status are intellectual property in the nature of a trademark, covered under the DTAA.
The court noted that there was no substantial challenge to the apportionment of the payment and dismissed the case.
- Who
- LG Electronics India and the Income Tax Department
- What
- Delhi High Court dismissed LG's petition to quash a 15% withholding tax demand on ICC mark payments
- Where
- Delhi High Court, India
- When
- The case dates back 22 years, with a recent decision in 2025
- Why
- The court upheld the Income Tax Department's classification of part of the payment as royalty, subject to 15% tax under the DTAA
Key facts
- Company
- LG Electronics India
- Payment Amount
- $11 million
- Tax Rate
- 15%
- Apportionment
- 1/3rd towards royalty, 2/3rd towards advertisement
- Agreement
- Singapore-India Double Taxation Avoidance Agreement (DTAA)
- Court
- Delhi High Court
- Year
- 2025
Quotes
Counsel for LG
Legal representative for LG Electronics India
“It is clear that the observation made by this Court qua the issue of royalty has been accepted by the Income Tax Department and thus, the issue is settled in terms of the judgment.”
thehindubusinessline.com
Division bench of the Delhi High Court
Judges presiding over the case in the Delhi High Court
“No substantial challenge has been made to the apportionment of the total payment into 1/3rd and 2/3rd. It is also not the case of the petitioner that the apportionment of the amount into royalty has to be at a lower rate. In any case, in view of our conclusion above, the said order cannot be faulted with.”
thehindubusinessline.com
Sources
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