Hindustan Unilever Limited (HUL), India’s largest fast-moving consumer goods (FMCG) company, has been served with an income tax demand of ₹1,559.69 crore for the financial year 2021–22 (assessment year 2022–23). The order was issued by the Assistant Commissioner of Income Tax, Central Circle 5 (2), Mumbai, under Section 143(3) read with Section 144C(13) of the Income Tax Act, 1961. The demand notice, raised under Section 156 of the Act, was received by the company on January 7, 2026.
Details of the Tax Demand
- Nature of the Order: The demand relates to transfer pricing adjustments and corporate tax disallowances connected to payments made to related parties.
- Company’s Response: HUL has clarified in its regulatory filing that the order will have no material impact on its financial position, operations, or other activities.
- Next Steps: The company has confirmed that it will file an appeal with the appellate authority within the permissible timeline, challenging the assessment order.
- No Penalties: Importantly, the order does not impose any penalties, sanctions, or restrictions on HUL’s operations.
Market Reaction
Shares of HUL came under focus following the announcement, though the company’s reassurance of no material impact helped limit investor concerns. Analysts believe that while such tax demands can create short-term uncertainty, the company’s strong fundamentals and market leadership in the FMCG sector provide resilience.
Broader Context
Tax disputes involving transfer pricing adjustments are not uncommon for multinational corporations operating in India. These disputes often revolve around the valuation of transactions with related parties. HUL’s decision to appeal is consistent with industry practice, and the outcome will depend on the appellate authority’s review.
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Conclusion
The ₹1,560 crore tax demand on HUL highlights the ongoing complexities of corporate taxation in India, particularly around transfer pricing. While the company has assured stakeholders of no material impact, the appeal process will determine the final outcome. For investors, the case underscores the importance of monitoring regulatory developments alongside market fundamentals.
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