Indian authorities have asked a court to quash Pernod Ricard’s bid to stop proceedings related to a $244 million tax demand that accused the French spirit giant of being a “habitual plaintiff” and plotting to “fraud” the government. has been alleged, legal documents show.
The Mumbai court, filed on October 3 by the Customs Authority of India, which has not been reported previously, underscores a growing dispute between Prime Minister Narendra Modi’s government and Pernod’s local unit that the company has held for more than a decade. How did he give importance to some of his imports till time.
The customs authority maintains that Pernod did this to avoid paying import taxes in full.
The conflict comes as Pernod Ricard is facing trade and regulatory tensions in India, one of its key growth markets where it holds a 17% stake. It earlier told Modi that the long-running disputes over the valuation of alcohol imports “stuck new investment” in India.
After India in June sought a tax refund from the maker of Chivas Regal and Absolute Vodka, Pernod challenged it in court, saying the investigation should be halted because it relied on inaccurate industry data, and that the process was “nothing”. So it was neither fair nor proper.”
In a 43-page October filing, India’s customs authority said the French company was resorting to a “delay strategy” by approaching the court for relief instead of responding to the government’s tax demand notice.
It accused the company of conspiracy to “defraud the Government of India from its legitimate revenue”.
Pernod “has been a habitual litigant and has always attempted to abuse the due process of law,” the filing said, referring to some of the previous tax demands Pernod has challenged in India.
Asked for comment, Pernod referred to an earlier released statement to Reuters, which said the company is actively working on demonstrating its position to Indian authorities and “always with full transparency and to the extent possible.” Tried to work in compliance with duty and regulatory requirements.
It declined to comment further because of ongoing litigation and the customs authority’s filings not being made public. The next hearing of the court case will be held in Mumbai on October 20.
The Indian investigation assessed Pernod India’s import bills of liquor from a group subsidiary of the UK-based Chivas Brothers and found that they had been undervalued for years.
The investigation found that to compensate for the low-priced imports, Pernod paid “heavy” dividends to the group’s holding company, Pernod Ricard in France, which also owns Chivas Brothers. The import duty on alcohol concentrate is 150% while the dividend attracts less taxes.
Long-running tax disputes in India have led to business uncertainty – in July, the company wrote a letter to a federal tax authority stating that the company was “facing significant business continuity challenges”, a Asking for resolution.
Last week, Pernod said that its India CEO, Thibault Cunei, had stepped down for health reasons.
(Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.)