HUL Gets Rs 963-Crore Tax Demand On Non-Deduction Of TDS In GSK Deal
There won't be any significant financial implications at this stage, HUL said.
Hindustan Unilever Ltd. received a demand of Rs 962.75 crore from the Income Tax Department on account of non-deduction of tax deducted at source as per tax laws. The demand includes interest of Rs 329.3 crore.
The tax demand related to TDS not paid while making remittance of Rs 3,045 crore (375.6 million euro) for payment towards acquisition of India HFD IPR from GlaxoSmithKline ‘GSK’ Group entities, according to an exchange filing on Monday.
The demand was raised by the office of the Deputy Commissioner of Income Tax, Mumbai through a letter on Aug. 23.
Hindustan Unilever acquired the health-food-drinks portfolio (GSK HFD) of GlaxoSmithKline, which includes the Horlicks brand in India, Bangladesh and 20 other predominantly Asian markets in 2018.
There will not be any significant financial implications at this stage pursuant to the demand, HUL has said.
The company has 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, HUL said.
It will appeal against the order and said it has an indemnification right to recover the demand raised by the Income Tax department.
