Pernod Ricard Withdraws Court Challenge Against India's $314 Million Tax Demand
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French firm Pernod Ricard has withdrawn its court challenge against India's $314 million tax demand for allegedly undervaluing Scotch whisky imports, marking a new twist in a four-year investigation.
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Why It Matters
French firm Pernod Ricard faced a $314 million tax demand from India for allegedly undervaluing Scotch whisky imports. The company had challenged this demand, arguing India failed to provide sufficient investigation data during its probe.
New Delhi: France's Pernod Ricard has withdrawn a court challenge against India's demand of $314 million in back taxes for allegedly undervaluing Scotch whisky imports for years, an order shows, marking a new twist in a four-year-old investigation.
The tax case is the biggest headache for Pernod in India, which contributes roughly 10% of its worldwide sales and is its biggest market by volume. The dispute comes on top of an antitrust case and a separate ban in New Delhi city that Pernod is battling due to allegations of liquor policy violations, which it denies.
Pernod had challenged the September tax demand which alleged the company withheld the age and composition of its whisky imports, significantly reducing its 150% tariff outgo, Reuters reported in May. Seeking to quash the demand, Pernod argued in a New Delhi court that India had not provided it with investigation data during the probe which could have helped it defend itself.
Open Questions
- What prompted Pernod Ricard to withdraw its court challenge?
- What are the next steps in the tax dispute?
- How will this impact Pernod Ricard's operations in India?
