The Bombay High Court has dismissed the petition by Hindustan Unilever against an August 2024 Assessment Order for a tax demand of Rs 962.75 crore, the company has informed stock exchanges.
Shares of Hindustan Unilever are lower by over a percent in early trade on September 25.
The company had filed a writ petition in the High Court challenging the Assessment Order dated August 23, 2024, and the subsequent demand notice. The tax demand was raised against HUL over non-deduction of TDS while making remittance payment for an acquisition from GSK Group entities.
HUL now has 15 days to file a stay application before tax authorities against the fresh order to be passed by the Assessing Officer, in which the company can make 'appropriate prayers', relating to the penalty. "The Hon’ble Court, has however, allowed the Company’s contentions on the facts and law to be kept open," the HUL statement added.
The court has also advised the tax department not to enforce any demand recovery till any stay application is disposed of.
HUL said it is in the course of evaluating its next steps in this regard.
The payment was made for the merger of GSK’s India brands with HUL, including Horlicks, Boost, Maltova, and Viva. The company had said in August that the demand will not have any significant financial implications at this stage.
In December 2018, Unilever had struck a deal to buy GSK's Horlicks nutrition business, boosting the Anglo-Dutch group's position in India.
The company has invoked its indemnification rights to recover the demand raised by the tax department, and said it will take appropriate action if the I-T department proceeds with the recovery of the demand.
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