P&G agrees to pay Rs 36 cr to settle tax liabilities

The firm has been asked to pay a tax of Rs 36 crore

Packaged consumer goods maker Procter & Gamble (P&G) on March 26 said it has arrived at an advanced pricing agreement with the income tax authorities to determine “appropriate transfer pricing methodology” for certain identified transactions, the firm said in an exchange filing.

The transactions between the firm’s affiliate units, which were under scrutiny, fall between the years 2010-11 and 2018-19, it said.

According to the agreement, “An additional tax liability, approximately of about Rs 36 crore (including interest) is payable. There will be a reduction in contingent liabilities of approximately Rs 87 crore, subject to withdrawal of relevant tax litigations by the respective parties.”

P&G's subsidiary Gillette India, too, reached a similar agreement with the I-T department for transactions during the financial years 2012-13 and 2014-15 to 2016-17.

"An additional tax liability, approximately of about Rs 8 crore (including interest) is payable. There will be a reduction in contingent liabilities of approximately Rs 250 crore, subject to withdrawal of relevant tax litigations by the respective parties," the firm said in a separate statement.

Last week, the P&G had announced the appointment of Kumar Venkatasubramanian as the company's new chief executive officer effective from May 1, 2024.

In the December quarter, the firm reported net profit at Rs 228.9 crore, registering a growth of 10.32 percent from Rs 207.47 crore in the same quarter of the previous financial year.

The profit growth was led by product price-mix, productivity, and moderating cost inflation versus the base period.

P&G Hygiene and Health Care was trading at Rs 16,384.25, down 0.53 per cent at 10:42 am on March 27, while, Gillette India stock was trading at Rs 6,599, up 0.16%.