Hindustan Unilever Faces Rs. 1,986 Crore Tax Notice from Income Tax Department
Hindustan Unilever Ltd (HUL), the Indian arm of global consumer goods giant Unilever Plc, disclosed on Friday that it has received a tax demand of Rs. 1,986 crore from the Income Tax Department. The notice pertains to the financial year 2020–21 and was issued under Sections 143(3) and 144C(13) of the Income Tax Act, 1961, along with a demand notice under Section 156. Hindustan Unilever also owns well-known brands including Rin, Surf Excel, Lux, Dove, Lifebuoy, closeup, horlicks and more.
HUL added in a recent regulatory filing, “The Tax authorities have made transfer pricing adjustments in the nature of disallowance of payments to related parties or challenged the valuation of such related party payments and corporate tax disallowances in the nature of depreciation claimed.”
HUL also sent a regulatory filing to the Bombay Stock Exchange (BSE) and stock exchanges. HUL added that the order was issued under Sections 143(3) and 144C(13) of the Income Tax Act, 1961 along with a demand notice under Section 156. HUL further clarified that the tax order had no impact on its finances or operations. On Thursday, a letter from the Assistant Commissioner of Income Tax (Mumbai) was also sent to the company.
However, HUL did not mention any specific fee or penalty arising from the order.
A few days after the company announced a 3.8% rise in net profit to Rs. 2,694 crore, it also reported that sales for the September quarter of FY’26 grew by 2.1%. However, the actual product sales (volume growth) stayed mostly the same because of temporary effects from GST rule changes and long-lasting rains in some parts of the country.
A year ago, HUL had logged a net profit in July to September of Rs 2,595 crore. HUL further stated, “consolidated Underlying Sales Growth of 2% and a flat Underlying Volume Growth in the September Quarter of 2025. Performance for the quarter reflected a transitory impact of GST changes and prolonged monsoon conditions in parts of the country.”
HUL, part of British multinational consumer goods company Unilever Plc, said that the EBITDA margin stood at 23.2%, which was lower by 90 bps year-on-year amidst higher investments in the business in the July-September quarter of this financial year (During the quarter).
Before exceptional items, HUL’s profit and tax decreased 4.8% to Rs 3,386 crore in the second quarter of FY’26, as against Rs 3,558 crore of the corresponding quarter a year ago.
HUL said it will continue to cooperate with the authorities and pursue the matter through due legal process.
