 "Hindustan Unilever, HUL")
FMCG giant Hindustan Unilever has said that it will appeal against the tax notice. | Representational
FMCG giant Hindustan Unilever has received a tax notice of Rs 962.75 crore, including an interest of Rs 329.33 crore, according to the company’s exchange filing.
The company added that the notice was issued over the non-deduction of tax deducted at source (TDS). This was related to a remittance of Rs 3,045 crore made for the acquisition of India Health Food Drink (HFD) intellectual property rights (IPR) from the GlaxoSmithKline (GSK) Group. The payment was made for the merger of GSK’s India brands with HUL, including Horlicks, Boost, Maltova, and Viva.
Notably, the tax demand was raised by the office of the Deputy Commissioner of Income Tax, Mumbai, through a letter on August 23. However, the company has said that the tax demand does not expect any significant financial implications at this stage.
“The company has a strong case on merits on tax not withheld, basis available judicial precedents, which have held that the situs of an intangible asset is linked to the situs of the owner of the intangible asset and hence, income arising on sale of such intangible assets are not subject to tax in India,” said HUL.
Will appeal against tax notice: HUL
HUL has said that it will appeal against the order. The company added it has an ‘indemnification right’ to recover the demand raised by the Income Tax department.
HUL stock slips marginally
The markets reacted marginally to the development as the HUL stock slipped 0.19 per cent to Rs 2,815.85 on NSE at 10.10 am on Tuesday (August 27).
HUL-GSK deal
HUL completed the merger of GlaxoSmithKline Consumer Healthcare Limited (GSKCH) with itself in 2020, over a year after the Rs 31,700 crore mega-deal was first announced.
As part of the merger, 3,500 employees became part of the Indian arm of the Anglo-Dutch giant Unilever. Since the deal, HUL has been distributing GSK’s brands like Eno, Crocin, Sensodyne, and others in the country.
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First Published: Aug 27 2024 | 12:31 PM IST