Colgate-Palmolive (India) on Monday said it received a transfer pricing order worth Rs 170 crore from the Income Tax (I-T) Department for the assessment year 2021-22. According to a stock exchange filing by the consumer products company, the department has disallowed “certain” international transactions to the company.
Transfer pricing refers to the actual price charged in a transaction between related entities which are part of a transnational group. Under the relevant rules, the taxman can prescbive adjustments to the prices involved in such transactions if they vary from similar transactions between unrelated parties.
“The Income Tax authority has issued the transfer pricing order making adjustments on Transfer Pricing issues. The company is awaiting completion of the draft assessment proceedings and post the same, an application will be made before the Dispute Resolution Panel,” Colgate-Palmolive (India) said in a press-release.
“There is no impact on financial, operation or other activities of the company due to this transfer pricing order,” it said.
The company’s stock price closed 0.92% down on Monday.