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Hindustan Unilever faces Rs1,986 crore tax demand over transfer pricing adjustments
Hindustan Unilever has received a ₹1,986 crore tax demand from the Income Tax Department over transfer pricing adjustments for FY2020–21, which the company plans to appeal.
Hindustan Unilever Ltd. (HUL), India’s largest consumer goods company, disclosed late Friday that it has received an assessment order from the Income Tax Department, demanding ₹1,986.25 crore in taxes for the financial year 2020–21.
The assessment, issued by the Assistant Commissioner of Income Tax, Central Circle 5(2) in Mumbai, stems from transfer pricing adjustments related to payments made to related parties and disputes over valuation of those transactions. The order also challenges certain corporate tax deductions, including depreciation claims.
In its regulatory filing to the stock exchanges, HUL said the order was issued under Sections 143(3) and 144C(13) of the Income Tax Act, 1961, accompanied by a notice of demand under Section 156.
The company emphasized that the order “has no material impact” on its finances, operations, or other activities. It added that it plans to contest the assessment by filing an appeal with the appellate authority within the permissible timeline.
HUL’s statement did not specify any penalties or sanctions arising from the order. The company is a subsidiary of global consumer goods major Unilever Plc and a key player in India’s fast-moving consumer goods sector, with a broad portfolio of household brands including Dove, Surf Excel, and Lifebuoy.
The National Company Law Tribunal (NCLT), Mumbai Bench, also approved HUL's long-awaited proposal to demerge its ice cream business into Kwality Wall’s (India) Ltd (KWIL), marking a key milestone in the FMCG major’s ongoing restructuring and value-unlocking strategy.
Tax-related disputes over transfer pricing — the pricing of goods, services, or intellectual property exchanged between related entities — have become a frequent point of contention between multinational companies and Indian tax authorities. HUL’s case is the latest in a series of assessments aimed at tightening compliance.
The company said it would continue to cooperate with the authorities while pursuing the matter through due legal process.
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