The notice arises from non-deduction of Tax Deducted at Source (TDS) relating to a remittance of Rs 3,045 crore made for the acquisition of Healthy food and drink from India (DFL) intellectual property rights (IPR) of the GlaxoSmithKline Group (GSK).
Notably, the notice relates to the acquisition of Horlicks brand for India from GSK for Rs 3,045 crore. Other GSKCH brands like Boost, Maltova and Viva have also been roped in. THEMthe portfolio of companies through this merger.
Despite strong demand, the company has indicated that it does not expect significant financial implications at this stage.
“The Company has a strong case on the merits of the withholding tax, based on the available judicial precedents, which have held that the location of an intangible asset is linked to the location of the owner of the intangible asset and, therefore, income arising from the sale of such intangible assets is not subject to tax in India,” HUL said.
In response to the suit, the FMCG company plans to appeal the order and take all necessary legal steps under Indian law. In addition, HUL has said that it has a right of indemnity, which allows it to recover the tax demand raised by the Income Tax Department from the relevant parties. The company is expected to take further steps to enforce this right.
HUL shares closed at Rs 2,820.70 apiece on August 26 on the BSE.
HUL completed the merger with GlaxoSmithKline Consumer Healthcare Limited (GSKCH), following the necessary approvals in 2020.
The consumer goods giant reported a 3% year-on-year rise in net profit at Rs 2,538 crore for the first quarter of FY25, in line with Wall Street’s estimate of Rs 2,541 crore.
HUL’s operating income for the reported quarter stood at Rs 15,166 crore, up 2 per cent year-on-year as compared to Rs 14,931 crore recorded in the June 2023 quarter.
Disclaimer:
The information contained in this post is for general information purposes only. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the post for any purpose.
We respect the intellectual property rights of content creators. If you are the owner of any material featured on our website and have concerns about its use, please contact us. We are committed to addressing any copyright issues promptly and will remove any material within 2 days of receiving a request from the rightful owner.