HUL Faces Rs 962.75 Crore Tax Demand Over GSKCH Acquisition

HUL has received a Rs 962.75 crore demand notice from the Income Tax Department for non-deduction of TDS on a Rs 3,045 crore payment to GSKCH for Intellectual Property Rights. HUL plans to appeal the order, citing legal precedents. The notice follows HUL's 2020 merger with GSKCH.

Leading FMCG maker HUL has been slapped with a Rs 962.75 crore demand notice by the Income Tax Department, concerning the non-deduction of Tax Deducted at Source (TDS) on a Rs 3,045 crore payment to GlaxoSmithKline Consumer Healthcare (GSKCH). This payment was made for acquiring Intellectual Property Rights (IPR) for health food drink brands such as Horlicks, Boost, Maltova, and Viva.

The notice, issued by the Deputy Commissioner of Income Tax, Mumbai, includes Rs 329.33 crore in interest and was received on August 23, 2024. HUL has announced its intention to appeal the order, arguing that judicial precedents support its position that the income from the sale of intangible assets like these is not taxable in India.

HUL completed the merger with GSKCH in 2020 through a Rs 31,700 crore deal. This isn't the first tax demand HUL has faced this year; in January, it was asked to pay Rs 447.5 crore in GST and penalties. Despite these challenges, HUL's revenue for FY24 stood at Rs 60,469 crore.

(With inputs from agencies.)