Demand relates to FY22 transfer pricing adjustments; company says no financial impact
Colgate-Palmolive (India) said on Thursday it has received an income tax assessment order raising a demand of Rs 267.64 crore for the 2021–22 financial year, primarily linked to transfer pricing adjustments and disallowance of certain expenses.
The assessment order was issued under Section 143(3) read with Section 144C(13) of the Income Tax Act, along with a notice of demand under Section 156, the company said in its disclosure to stock exchanges.
“There is no impact on financials, operations or any other activities of the company due to the said order,” Colgate-Palmolive (India) said in the disclosure.
The company said it would challenge the order and plans to file an appeal before the Income Tax Appellate Tribunal.
Colgate-Palmolive India has faced similar tax demands in recent years, including a separate notice of about Rs 248.74 crore for AY 2020-21 and a demand of over Rs 254 crore for AY 2021-22, both largely linked to transfer pricing issues.
The company posted a 17 per cent year-on-year drop in net profit for the September quarter.
The share of Colgate was trading at Rs 2,089 in the afternoon, down by 0.23 per cent basis point on BSE.
Meanwhile, industry bodies are urging the government to address lingering issues around tax certainty and dispute resolution. They have cautioned that ambiguities in anti-avoidance provisions, unresolved tax treaty matters and uncertainty following the equalisation levy could trigger a new wave of direct tax disputes and undermine the ease of doing business.
