Hindustan Unilever (HUL) has received a tax notice of Rs 962.75 crore, including an interest of Rs 329.33 crore for the Rs 3,045-crore acquisition of the India Health Food Drink (HFD) business from the GlaxoSmithKline (GSK) Group, the FMCG major said on Tuesday. The company said that it would appeal against the order and that it had an ‘indemnification right’ to recover the demand raised by the income tax department.
In an exchange notification, HUL said that the notice was issued over the non-deduction of tax deducted at source (TDS) for the acquisition which included Horlicks, Boost, Maltova, and Viva.
“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,” HUL said.
The tax demand was raised by the office of the deputy commissioner of income tax, Mumbai, through a letter on August 23. The company said that the tax demand does not expect any significant financial implications at this stage.
The acquisition of the GSK business was completed in 2020, following the necessary approvals.
On Tuesday, shares of HUL closed at Rs 2,767, down almost 2% from the previous day’s close.
From: financialexpress
Financial News
