India Probes Pernod Ricard and Diageo Over Scotch Tariffs
Indian tax officials are investigating Pernod Ricard and Diageo for allegedly misclassifying bulk Scotch imports to avoid higher tariffs under a trade pact with the United Kingdom.
The Directorate of Revenue Intelligence is investigating whether liquor companies Pernod Ricard and Diageo wrongly classified bulk Scotch imports to benefit from lower tariffs under a trade pact between India and the United Kingdom. The pact, which took effect on July 15, reduced import taxes on specific Scotch imports from 150% to 75%, but tax inspectors argue that this relief does not apply to bulk concentrates.
As part of the probe, authorities conducted an unexpected visit to Pernod Ricard's headquarters near New Delhi and searched multiple offices of United Spirits, the Indian unit of Diageo. The investigation is part of an industry-wide exercise and occurs amid a broader history of import tariff disputes between the Indian government and foreign investors.
Both Pernod Ricard and Diageo stated they are cooperating with authorities and have complied with local laws.
