Key Takeaways
- HUL received Rs 1,986 crore tax notice for FY 2020-21
- Company will appeal against the income tax department’s order
- Tax dispute involves transfer pricing and depreciation claims
- HUL confirms no financial or operational impact from the notice
Hindustan Unilever (HUL) has been slapped with a massive Rs 1,986 crore tax notice by the Income Tax Department, the company revealed in a regulatory filing on Friday. The FMCG giant has stated it will appeal against the demand, which pertains to assessment year 2020-21.
Tax Notice Details
The tax authorities have raised disputes over valuation of certain related-party transactions and questioned some depreciation claims. The notice was issued by the Assistant Commission of Income Tax in Mumbai on Thursday.
“The Tax authorities have made transfer pricing adjustments in the nature of disallowance of payments to related parties or challenged the valuation of such related party payments and corporate tax disallowances in the nature of depreciation claimed,” HUL said in a regulatory filing.
HUL confirmed the tax order would have no impact on its financials or operations. The company plans to file an appeal with the appellate authority within the permitted timeline.
Recent Financial Performance
The tax notice comes shortly after HUL reported a 3.8% rise in consolidated net profit to Rs 2,694 crore for the September quarter. Revenue increased to Rs 16,034 crore from Rs 15,703 crore in the same quarter last year.
However, the company faced challenges with flat underlying volume growth, attributed to GST changes and prolonged monsoon conditions. EBITDA margin stood at 23.2%, down 90 basis points year-on-year due to higher business investments.
Profit before exceptional items and tax declined 4.8% to Rs 3,386 crore in Q2 FY26 compared to Rs 3,558 crore in the corresponding quarter last year.
