Income Tax Department Issues Rs 963 Crore Demand Notice to HUL
Income Tax Department Issues Rs 963 Crore Demand Notice to HUL
Hindustan Unilever Limited (HUL) has received a demand notice from the Income Tax Department amounting to Rs 962.75 crore. The company plans to appeal this notice.
The notice pertains to the non-deduction of Tax Deducted at Source (TDS) on a payment of Rs 3,045 crore made to GlaxoSmithKline Consumer Healthcare (GSKCH) for acquiring the Intellectual Property Rights (IPR) of its health Foods Drinks (HFD) business, which includes brands like Horlicks, Boost, Maltova, and Viva.
According to HUL's exchange filing, the demand includes Rs 329.33 crore in interest. The notice was issued by the Deputy Commissioner of Income Tax, Int Tax Circle 2, Mumbai, and was received by the company on august 23, 2024.
HUL stated that the demand is "appealable" and that it will take "necessary actions" as per indian law. The company believes it has a robust case against the claim, citing judicial precedents which suggest that the location of an intangible asset is tied to the asset's owner, implying that income from such sales may not be subject to tax in India.
The company noted that, at this stage, there should not be any significant financial impact. HUL had previously completed the merger with GSKCH in 2020 through a Rs 31,700 crore deal, which included an additional payment of Rs 3,045 crore for acquiring GSKCH’s brands.
Earlier this year, HUL also data-faced GST (Goods and services Tax) and penalty demands totaling Rs 447.5 crore. For FY24, the company's revenue was reported at Rs 60,469 crore.
Hindustan Unilever Limited (HUL) has received a demand notice from the Income Tax Department amounting to Rs 962.75 crore. The company plans to appeal this notice.
The notice pertains to the non-deduction of Tax Deducted at Source (TDS) on a payment of Rs 3,045 crore made to GlaxoSmithKline Consumer Healthcare (GSKCH) for acquiring the Intellectual Property Rights (IPR) of its health Foods Drinks (HFD) business, which includes brands like Horlicks, Boost, Maltova, and Viva.
According to HUL's exchange filing, the demand includes Rs 329.33 crore in interest. The notice was issued by the Deputy Commissioner of Income Tax, Int Tax Circle 2, Mumbai, and was received by the company on august 23, 2024.
HUL stated that the demand is "appealable" and that it will take "necessary actions" as per indian law. The company believes it has a robust case against the claim, citing judicial precedents which suggest that the location of an intangible asset is tied to the asset's owner, implying that income from such sales may not be subject to tax in India.
The company noted that, at this stage, there should not be any significant financial impact. HUL had previously completed the merger with GSKCH in 2020 through a Rs 31,700 crore deal, which included an additional payment of Rs 3,045 crore for acquiring GSKCH’s brands.
Earlier this year, HUL also data-faced GST (Goods and services Tax) and penalty demands totaling Rs 447.5 crore. For FY24, the company's revenue was reported at Rs 60,469 crore.