HC OKs tax on LG Electronics' payment to Global Cricket for advt, ICC name
This story was originally published at 18:37 IST on 24 December 2025
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NEW DELHI – Closing a case after more than two decades, the Delhi High Court Wednesday said that LG Electronics India Pvt. Ltd.'s part payments to Global Cricket Corp. Pvt. Ltd. for acquiring advertising rights and using the International Cricket Council trademark were "royalty" under the Income Tax Act, 1961. Hence, 15% tax should be deducted at source from the part payments made by LG Electronics India to Global Cricket Corp, the court said.
The case has its genesis in Global Cricket Corp., a company incorporated in Singapore, entering into an agreement with ICC Development (International) Ltd. in 2000. Under this agreement, Global Cricket Corp. obtained commercial rights to appoint third-party sponsors, suppliers, broadcasters and other licensees regarding the cricket match events owned by International Cricket Council.
In 2002, Global Cricket Corp. had signed an agreement with LG Electronics Inc., Korea, LG Electronics India Ltd. and LG AD Inc., wherein the LG companies acquired the advertising and promotional rights for displaying the LG mark on certain advertising sites in ground. For the advertisement and promotional rights, LG group agreed to pay an amount of $27.5 million to Global Cricket Corp., of which an amount of $11 million was borne by the petitioner and the rest by LG Electronics Inc., Korea.
Thereafter, LG Electronics requested the income tax department to issue a certificate allowing it to remit the given amount to its parent company in Korea without deduction of tax. However, the income tax department rejected the application and said that the amount paid by LG Electronics was in the nature of royalty for acquisition of rights to exploit the commercial potential of the events. The tax department said LG Electronics had secured the right to use the ICC trademark in advertising material. This use of trademark resulted in enhancement of visibility to customers of LG Electronics and helped in deriving the benefit of goodwill and standing of International Cricket Council and such transaction was taxable under section 9(1)(vi) and section 5(2) of the Income-tax Act, 1961 read with Article 12 of the Singapore-India Double Taxation Avoidance Agreement, the department said.
On Wednesday, shares of LG Electronics India Ltd. ended 0.7% lower at INR 1,535.50 on the National Stock Exchange. End
Reported by Surya Tripathi
Edited by Avishek Dutta
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