United Breweries Faces ₹54.83 Crore Tax Penalty Orders
United Breweries received penalty orders totaling ₹54.83 crore from the Income Tax Department for various assessment years. These penalties are related to issues currently under appeal before tax tribunals. The company expects no material financial impact, citing a strong defense and minimal pre-deposit requirement.
While the company believes there will be no material financial impact, the penalty amount of over ₹54 crore is substantial and could affect profitability if the appeals are unsuccessful, warranting a medium impact assessment.
The company has received significant penalty orders from the Income Tax Department, which represents a negative financial and legal development.
United Breweries Limited (UBL) has disclosed receiving penalty orders from the Assessment Unit, Income Tax Department – National Faceless Assessment Centre (NFAC). These orders pertain to Assessment Years 2013-14, 2014-15, 2017-18 (two orders), 2018-19, 2020-21, and 2022-23, resulting in an aggregate penalty demand of ₹54,82,99,656.
The penalties have been levied under various sections of the Income-tax Act, 1961, including Section 271(1)(c) and Section 270A. For AY 2014-15, a penalty of ₹8,15,27,270 has been levied under Section 271(1)(c). For AY 2017-18, penalties of ₹4,15,29,600 and ₹2,50,94,010 have been levied under Section 270A. A penalty of ₹1,03,82,400 under Section 270A has been levied for AY 2018-19. For AY 2013-14, the penalty is ₹9,53,62,045 under Section 271(1)(c). For AY 2020-21, a penalty of ₹2,45,12,525 under Section 270A has been levied, and for AY 2022-23, the penalty is ₹2,69,89,1806 under Section 270A.
In several instances, the NFAC has levied penalties on issues that are still pending adjudication before appellate authorities, including the Hon’ble Income Tax Appellate Tribunal (ITAT) and the Learned Commissioner of Income-tax (Appeals). The company states that it has already filed appeals against the assessment orders on which these penalties are based. Additionally, the company noted instances of perceived mistakes on record by the NFAC, including alleged excess penalties and duplicative penalties.
United Breweries Limited believes it has a strong case to defend its position before the appellate authority and does not anticipate any material financial impact, except for a minimal statutory pre-deposit required for admitting an appeal. The company is pursuing appropriate legal remedies.
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United Breweries Limited filed this with the NSE as a statutory disclosure, categorised under other regulatory filings. It is a primary document, not a recommendation, and the desk marks it medium impact: worth reading, rarely worth acting on by itself.
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