Hindustan Unilever Receives INR 1,986 Crore Tax Demand Notice from Indian Authorities

On 31 October, Hindustan Unilever disclosed that company has received a sizable tax notice totalling INR 1986 crore. The UK-based company's Indian division claimed that the Income Tax Department had questioned certain of its tax-related depreciation claims and contested the valuation of several related-party transactions.

The business, which owns well-known brands like Rin, Surf Excel, Lux, and Horlicks, has also stated that it intends to challenge the judgement, which concerns FY 2020–21. In a regulatory filing, HUL stated that corporation tax disallowances in the form of claimed depreciation and transfer pricing adjustments in the form of related party payment disallowances or challenges to the valuation of related party payments had been made by the tax authorities.

HUL to File Necessary Appeal

According to information posted on the BSE, the business would "file the necessary appeal with the appellate authority" within the allotted time frame. Additionally, Hindustan Unilever affirmed that neither its operations nor finances were impacted by the tax ruling.

The Mumbai Assistant Commission of Income Tax sent the letter to the business on October 30. The company's consolidated net profit increased by 3.8% to INR 2,694 crore just days before the release of the report. Due to the temporary effects of the GST amendments and the extended monsoon in some regions of the country, sales increased 2.1% in the September quarter of FY'26, but there was "flat underlying volume growth". HUL recorded a net profit of INR 2,595 crore during the previous year's July–September quarter.

HUL’s Impressive Performance in this Financial Year

Revenue for the company increased from INR 15,703 crore in the same time last year to INR 16,034 crore in the July-September quarter of this fiscal year. HUL reported a "consolidated underlying sales growth of 2% and a flat underlying volume growth in the September quarter of 2025," according to an earnings announcement.

The temporary effects of the GST amendments and the extended monsoon season in several regions of the nation were evident in the quarter's performance. Despite increased business investments, the EBITDA margin for the quarter was 23.2%, down 90 basis points year over year, according to HUL, a division of the British multinational consumer products corporation Unilever Plc. In the second quarter of FY'26, HUL's profit before unusual items and tax decreased 4.8% to INR 3,386 crore from INR 3,558 crore in the same quarter.