HUL faces USD 226M tax demand over FY21 transfer pricing dispute
HUL is set to appeal the order, while maintaining that it will have no material impact on its financials or business operations.
INDIA – Hindustan Unilever Limited (HUL) has been hit with a significant tax demand order of Rs 1,986.25 crore (USD 226 million) for the financial year 2020-21, corresponding to assessment year 2021-22.
The Indian income tax authorities issued this demand order, specifically the Assistant Commissioner of Income Tax, Central Circle 5(2), Mumbai, on October 30, 2025.
The tax demand primarily concerns transfer pricing adjustments and corporate tax disallowances.
The Indian tax authorities have contested the valuation of certain related-party transactions and challenged payments made by HUL to group entities.
Additionally, the demand involves disallowances concerning depreciation claims claimed by the company.
Despite this substantial tax demand, HUL has confirmed that the order will not have any material impact on its financial performance, operations, or other business activities.
The company has stated that it will file an appeal within the permitted time frame to contest this demand.
HUL September 2025 quarter results
Hindustan Unilever Limited recently announced its financial results for the quarter ended 30th September 2025, reporting a consolidated Underlying Sales Growth (USG) of 2% with flat Underlying Volume Growth (UVG).
The company’s EBITDA margin was 23.2%, a 90-basis-point decline from the previous year, primarily due to increased investments in the business.
Profit After Tax before exceptional items decreased by 4%, but overall Profit After Tax grew by 4%.
Segment-wise, Home Care delivered mid-single-digit volume growth, offset by earlier price reductions, resulting in flat sales growth.
The Fabric Wash category saw mid-single-digit growth, driven by strong double-digit growth in liquid detergent, supported by competitive pricing and successful innovations.
Household Care saw a strong double-digit volume growth, led by dishwashing liquids. During the quarter, HUL launched Comfort Perfume Deluxe, a premium fabric conditioner range inspired by award-winning fragrances, featuring a perfume-first formulation for a sophisticated clothes fragrance experience.
The Beauty & Wellbeing segment recorded 5% sales growth, driven by strong performance in Skin Care and Health & Wellbeing, though Hair Care turnover was dampened by GST rate rationalisation.
Skin Care, including color cosmetics, grew in the high single digits, propelled by the Future Core and Market Makers portfolios, alongside adequate winter-season stocking.
New product launches included Pond’s Hydra Miracle Ultralight Biome moisturizer with microbiome benefits, Vaseline Cloud Soft tailored for Indian facial skin, and OZiva Phyto Ceramides + Collagen Builder, an ingestible skincare supplement.
In Personal Care, turnover remained flat due to GST transitions. Skin Cleansing saw double-digit growth in premium soaps; Bodywash strengthened its competitive position; Oral Care experienced a slight decline, while Closeup posted low-single-digit growth.
The relaunch of Pears soap with refreshed packaging and the expansion of the Lux International soap range highlighted continued premiumisation efforts.
The Board declared an interim dividend of INR 19 per share for the fiscal year ending 31st March 2026.
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