INDIA – United Spirits, a subsidiary of global beverage giant Diageo, has reported a tax demand of Rs 4.47 crore (US$540,396) from Maharashtra state tax authorities for the fiscal year 2018-19, citing non-submission of statutory declaration forms.  

The assessment order, dated March 5, 2024, encompasses Central Sales Tax (CST) and Maharashtra Value Added Tax (MVAT), with the state tax authority seeking Rs 1.21 crore (US$146,277) for MVAT, including a Rs 1 lakh (US$1,208) penalty, and Rs 3.26 crore (US$394,103) for CST. 

In response to the tax demand, United Spirits expressed its intention to contest the matter, stating, “Deputy Commissioner, State Tax has levied demand on non-submission of statutory declaration forms and disallowed an element of input tax credit.”  

The company plans to file an appeal before higher authorities, confident in the strength of its case and expecting no significant financial implications. 

The tax demand follows United Spirits’ robust performance in the third quarter of 2023, where it recorded a commendable 63.5 percent increase in consolidated net profit, reaching Rs 350.2 crore (US$42.11M).  

This marked a substantial growth compared to the Rs 214.2 crore (US$25.76M) net profit in the corresponding quarter the previous year. The company’s revenue from operations also experienced positive growth, rising by 5.32 percent to Rs 6,962 crore (US$838.29M). 

In November 2023, United Spirits unveiled plans to cease operations at a manufacturing unit in Uttar Pradesh, India, as part of a comprehensive supply chain agility program.  

The decision, driven by factors such as market conditions and cost-effectiveness, aligns with the company’s strategy to streamline operations, focus on core brands, enhance productivity, and adapt to changing market dynamics. 

Last year also saw Diageo India introduce Tanqueray Rangpur and Tanqueray Malacca to cater to the rising demand for innovative and diverse gin options in the region. 

According to the beverage giant, these two novel variants are carefully crafted to appeal to consumers seeking unique and exotic flavours for their gin cocktails. 

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