Hindustan Unilever Limited (HUL), India’s largest fast-moving consumer goods (FMCG) company, has received a tax demand of Rs 962 crore from the tax authorities in connection with its acquisition of GlaxoSmithKline Consumer Healthcare (GSKCH) India in 2018.
The tax department has alleged that HUL undervalued the assets of GSKCH India during the acquisition process, resulting in a tax liability of Rs 962 crore. HUL has strongly denied these allegations and has stated that it followed all applicable laws and regulations in the transaction.
The acquisition of GSKCH India for Rs 3,000 crore was a significant milestone for HUL, as it strengthened the company’s presence in the health and wellness segment. However, the tax dispute has cast a shadow over the deal and could lead to protracted legal proceedings.
HUL has said that it is committed to resolving the tax dispute amicably and will take all necessary steps to protect its interests. The company has also indicated that it is confident of its position and believes that the tax authorities will ultimately recognize the validity of its claims.
The tax demand against HUL comes at a time when the Indian government is intensifying its efforts to crack down on tax evasion and avoidance. The government has been taking a tough stance on multinational companies and has increased scrutiny of their tax practices.
The outcome of the tax dispute between HUL and the tax authorities will have significant implications for the FMCG sector in India. If the tax authorities prevail, it could set a precedent for other multinational companies operating in the country.
Additional Information on HUL deal
- HUL is a joint venture between Unilever plc and the Government of India.
- GSKCH India is a leading player in the Indian health and wellness market with brands such as Horlicks, Boost, and Eno.
- The acquisition of GSKCH India was the largest deal in the Indian FMCG sector at the time.
