United Spirits Gets Big Relief On Tax Demand

United Spirits said the Commissioner of Central Tax, Bengaluru, has reduced its tax demand to ₹8.8 million from ₹5.28 billion, and imposed a penalty of an equal amount along with applicable interest. The company was also granted full relief from a ₹1.95 billion service tax demand, it said in a regulatory filing.

The original demand, spanning the period from September 2004 to June 2017, was based on alleged service tax dues on income received from contract bottling units, categorised under intellectual property rights services. It also included issues related to central value-added tax credit, the company said, citing the show cause notice.

United Spirits, a subsidiary of Diageo India, said it does not expect any financial impact from the order but plans to challenge it to contest the remaining demand.