India Investigates Pernod Ricard and Diageo Over Bulk Scotch Import Classifications
Indian tax authorities investigate Pernod Ricard and Diageo over bulk Scotch import classifications and tariff cuts under the India-UK trade agreement.
POLICY WIRE — New Delhi, India — Indian tax authorities have launched an active investigation into major multinational liquor manufacturers Pernod Ricard and Diageo over the classification of their bulk Scotch whisky imports. Officials are examining whether these companies improperly utilized reduced tariff rates established under a recent bilateral trade agreement.
According to knowledgeable sources, tax inspectors conducted unexpected visits to corporate offices belonging to both alcohol giants to gather documentation and review import practices. Last week, authorities made a surprise appearance at Pernod’s India headquarters located near New Delhi, where investigators questioned senior corporate executives regarding their Scotch shipments.
The regulatory scrutiny centers on a trade agreement that took effect on July 15, under which India lowered import levies on qualifying Scotch imports from 150% down to 75%. Indian investigators allege that Pernod Ricard intentionally concealed the age and true composition of its imported Scotch whisky to obscure its actual market value and bypass correct duty payments.
This customs dispute has already triggered a significant legal battle after the French beverage firm was issued a staggering $314 million back-tax demand. The ongoing inquiries into both Pernod and Diageo represent a broader pattern of heightened regulatory oversight targeting foreign investors operating within the country’s domestic market.
Reporting by Policy-Wire (PW)
