Hindustan Unilever revealed on Friday that it had received a massive tax notice for Rs 1986 crore. The Indian arm of the UK-based company said the Income Tax Department had disputed the valuation of certain related-party transactions and raised questions about some of its depreciation claims for tax purposes. The company, which owns popular brands such as Rin, Surf Excel, Lux and Horlicks, has also indicated plans to appeal against the order which pertains to FY 2020-21.
“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 said in a regulatory filing.
Details uploaded on BSE also indicated that the company would “file necessary appeal with the appellate authority” within the permitted timeline. Hindustan Unilever also confirmed that the tax order had no impact on the its finances or operations. The missive was sent to the company on Thursday by the Assistant Commission of Income Tax in Mumbai.
HUL reports Q2 profit rise
The report comes mere days after the company reported a 3.8% rise in consolidated net profit at Rs 2,694 crore. Sales were up 2.1% in the September quarter of FY’26 with a “flat underlying volume growth” due to the transitory impact of GST changes and prolonged monsoon in parts of the country. HUL had had logged a net profit of Rs 2,595 crore in the July-September quarter a year ago.
The company’s revenue stood at Rs 16,034 crore in the July-September quarter of this financial year, up from Rs 15,703 crore in the corresponding period a year ag. An earning statement also noted that HUL had a “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.”
During the quarter, the EBITDA margin stood at 23.2%, which was lower by 90 bps year-on-year amidst higher investments in the business, said HUL, part of British multinational consumer goods company Unilever Plc.
HUL’s profit before exceptional items and tax was down 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.
(With inputs from agencies)
