HUL's revenue in FY24 was Rs 60,469 crore.
According to HUL, the said demand order is “appealable” and it will take “necessary action” as per the law prevailing in India.
Leading FMCG maker HUL said it has received a demand notice of Rs 962.75 crore from the Income Tax Department and will appeal against the order.
According to a recent exchange filing, the notice relates to non-deduction of TDS on payment of Rs 3,045 crore to GlaxoSmithKline Consumer Healthcare (GSKCH) for acquisition of intellectual property rights of the health foods drinks (HFD) business consisting of brands such as Horlicks, Boost, Maltova and Viva.
It said, “A demand of Rs 962.75 crore (including interest of Rs 329.33 crore) has been raised on the company for non-deduction of TDS as per the provisions of the Income Tax Act, 1961 while making remittance of Rs 3,045 crore (375.6 million euros) towards acquisition of Bharat HFD IPR from GlaxoSmithKline 'GSK' group entities.”
According to HUL, the said demand order is “appealable” and it will take “necessary action” as per the law prevailing in India.
HUL said it believes it has a “strong case on the merits for non-withholding of tax” based on available judicial precedents, which have held that the location of the intangible asset is linked to the location of the owner of the intangible asset and hence, income arising from sale of such intangible assets is not subject to tax in India.
The demand notice was issued by Deputy Commissioner of Income Tax, International Tax Circle 2, Mumbai and was received by the company on August 23, 2024.
“There should not be any significant financial impact at this stage,” HUL said.
The FMCG giant had completed the merger with GSKCH in 2020 after a mega deal worth Rs 31,700 crore. As per the deal, it had paid an additional Rs 3,045 crore to acquire GSKCH's brands such as Horlicks, Boost and Maltova.
In January this year, HUL had received a total demand of Rs 447.5 crore from the authorities in the form of GST (goods and services tax) and penalties.
HUL's revenue in FY24 was Rs 60,469 crore.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed – PTI)
