Fast-moving consumer goods (FMCG) maker Hindustan Unilever Limited (HUL) has received a tax demand of ₹962.75 crore, which includes ₹329.33 crore interest from the income tax department.
The company, in a stock exchange filing, informed that the notice pertains to the non-deduction of TDS related to the ₹3,054 crore payment for the acquisition of health food drink (HFD) intellectual property rights (IPR) from GlaxoSmithKline ‘GSK’ group entities.
Further, the company said there would be no significant financial implications at this stage.
“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. As the Demand Order is appealable, the Company will be taking necessary actions in accordance with the law prevailing in India. Further, the Company has an indemnification right to recover the demand raised by the Income Tax department and will undertake necessary steps in furtherance of the same,” HUL informed the stock exchange.