Shares of United Spirits were trading 0.5 percent higher at open on the NSE on September 14, a day after the company announced it has received VAT & CST assessment orders for FY21, totaling a demand of about Rs 7 crore. In a regulatory filing, United Spirits said that the tax authority has denied the input tax credit taken by the company on ENA (extra neutral alcohol) purchased. As per the order received by the company, the ENA is subject to GST and raised VAT demand of Rs 98 Lakh (including a penalty of Rs 12,000) and CST demand of Rs 5 crore (including a penalty of Rs 2,000).
Follow our market blog for more updates
United Spirits has said that it will be taking appropriate measures to contest this. As per the filing, the company has also filed a writ petition before the Madhya Pradesh High Court against the denial of credit for the previous financial years. While this petition has been admitted, the proceedings have been stayed.
Also read: United Spirits Standalone June 2023 Net Sales at Rs 5,312.50 crore, up 144.89% Y-o-Y
In a post earnings press release, Hina Nagarajan, MD & CEO of Diageo India, said, "We have commenced fiscal 2024 with a robust first quarter performance. While inflationary pressures remain, our strategy to reshape the portfolio combined with revenue growth management and focus on everyday efficiency is driving sustainable growth across the Prestige & Above segment." For Q1FY24, the company reported a net profit of Rs 238.20 crore in June 2023, up by 13.27 percent from Rs 210.30 crore in June 2022.
United Spirits is the Indian subsidiary of global alcoholic beverages brand Diageo. In a recent interaction with CNBC TV18, Nagarajan said that that the sector is poised to witness a deceleration in volume expansion but a rise in value expansion.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
