Brands
Nestlé India faces Rs 6.67 crore VAT demand from tax authorities
Company says reassessment order will not materially affect operations or financials
MUMBAI: Even the biggest brands occasionally find themselves with an unexpected item on the bill. Nestlé India has received a reassessment order from tax authorities raising a VAT demand of more than Rs 6.66 crore, although the FMCG giant says the development will have no material impact on its business.
In a regulatory filing on Wednesday, the company said the Office of the Superintendent of Taxes, VAT had issued an order confirming a VAT demand of Rs 3.41 crore, along with interest of Rs 2.92 crore and a 10 per cent penalty of Rs 34.10 lakh, taking the total demand to approximately Rs 6.67 crore.
Despite the financial claim, Nestlé India maintained that the reassessment order would not materially affect its financial position or day-to-day operations.
“There is no material impact on financials, operations or other activities of the Company,” the company said in its stock exchange filing.
The latest tax development comes shortly after Nestlé India found itself facing scrutiny over its flagship Maggi noodle brand.
Last month, media reports suggested that the Food Safety and Standards Authority of India (FSSAI) had issued notices to Nestlé India and other food companies over alleged shortcomings related to hygiene, sanitation, food handling, storage practices, waste management, pest control and employee hygiene. Separately, social media posts also alleged the presence of infestation in Maggi noodles.
Nestlé India rejected those claims, stating that it had not received any notice from FSSAI regarding the alleged hygiene issues. The company also dismissed the infestation allegations, describing them as being based on an unverified social media account.
According to the company, it was unable to contact the complainant or obtain the product sample for independent verification. Nestlé added that it had submitted a detailed representation to the authorities, supported by batch records, market sample analysis and laboratory test reports, to address the concerns.
While the tax reassessment adds another regulatory matter to the company’s agenda, Nestlé India has maintained that neither the VAT demand nor the earlier food safety allegations are expected to disrupt its business operations as it continues to defend its position before the relevant authorities.
