New Delhi: India’s largest consumer goods company, Hindustan Unilever Limited (HUL), is facing a fresh legal hurdle as tax authorities have raised a demand exceeding ₹1,500 crore. The company disclosed on Thursday that it received an Assessment Order and a subsequent Notice of Demand under the Income Tax Act, 1961.
The order, passed by the Assistant Commissioner of Income-Tax (Central Circle 5(2), Mumbai), pertains to FY 2021-22 (Assessment Year 2022-23). According to the company’s filing, the authorities have focused on two primary areas:
Transfer Pricing: Challenges regarding the valuation and disallowance of payments made to related parties.
Corporate Tax Adjustments: Disallowances involving depreciation claims and other similar adjustments from previous financial years.
Despite the high value of the demand—totaling ₹1,559.69 crore—HUL has assured investors that the development does not currently pose a threat to its business.
”There is no material impact on financials, and no impact on operations or other activities of the company due to this order,” HUL stated in its regulatory filing. The company emphasized that it would follow the legal course of action by filing a necessary appeal with the appellate authority within the stipulated timelines.
This demand comes at a time when HUL is navigating a complex demand environment in the FMCG sector. Tax disputes regarding transfer pricing are not uncommon for multinational corporations in India, often involving lengthy litigation processes.
Shares of Hindustan Unilever Limited (NSE: HINDUNILVR) will be in focus during Friday’s trading session as investors react to the potential long-term tax liability.