Indian authorities have demanded that Pernod Ricard pay $244 million for reportedly undervaluing concentrate imports for over a decade, according to Reuters.
The demand is the latest setback for Pernod in India, where it has long been lobbying Prime Minister Narendra Modi and his tax officials to settle disputes related to the valuation of liquor imports.
The notice from India’s customs authority, dated 27 June, relates to liquor concentrates imported from a Pernod subsidiary, UK-based Chivas Brothers.
Indian authorities inspected import bills for 2009-10 to 2020-21, and found Pernod Ricard India had undervalued liquor concentrates in its declarations, said the notice, which resulted in lower import duty payments.
Officials said the company owed an additional duty of 20.1 billion rupees ($244 million), plus interest, for imports up to 2020.
“There are ample reasons to doubt the truth or accuracy of the value declared in relation to the imported goods,” said the notice to Pernod. “It appears that the import price has been decided in such a manner as to maximise profits accruable to holding companies … The aspect of undervaluation has been taken care of by way of payment of hefty amounts as dividends to the ultimate holding company.”
In a statement, Pernod Ricard India said was working on “asserting and demonstrating its position to the Indian authorities” and that it had “always endeavoured to act with full transparency and in compliance with customs and regulatory requirements”.
Pernod has appealed in court – the hearing starts today.
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