Income Tax Department sends tax notice of Rs 962 crore to HUL, case related to acquisition of Horlicks

Hindustan Unilever has got a tax notice of Rs 962.75 crore from the Income Tax Department. This also includes interest of Rs 329.33 crore. The FMCG company informed the exchanges on Monday. This notice is related to the non-deduction of tax at source (TDS) of Rs 3,045 crore spent for the acquisition of intellectual property rights of India Health Food Drink (HFD) from GlaxoSmithKline group.

HUL had acquired the Horlicks brand from GSK for an estimated Rs 3,045 crore. It has also added other brands including Boost, Maltova, and Viva of the GSKCH to its portfolio. However, following massive demand it seems that the firm has ruled out any major financial implications at this stage.

HUL said, "The company has a strong case for non-withholding of tax, based on available judicial precedents which have held that the location of intangible assets is linked to the location of the owner of the intangible assets and hence, income arising from the sale of such intangible assets is not subject to tax in India."