Nestle India Slapped with Rs 82.8 Million Tax Penalty Amid Customs Duty Dispute

Nestle India Limited has received a tax penalty amounting to Rs 82.8 million (approximately Rs 8.28 crore) following the upholding of a customs duty dispute by the Commissioner of Customs (Appeals), Mumbai. The penalty demand arose under Section 28 (4) read with Section 28AA of the Customs Act, 1962, involving customs duty, applicable interest, and an equal amount as penalty.

The penalty relates to a previous order by the Deputy Commissioner of Customs which Nestle India had initially challenged. However, the appellate authority upheld the original order indicating that the company must pay customs duty alongside interest and penalties.

Despite this, Nestle India has assured stakeholders that the penalty will not have any material adverse impact on its financial standing or day-to-day operations. The company intends to explore all legal avenues to challenge and potentially overturn the ruling.

This development comes amid Nestle India actively managing business pressures such as commodity cost inflation and regulatory compliance.

Key Highlights

Nestle India faces tax penalty of Rs 82.8 million due to customs duty dispute.

Order issued under Customs Act Sections 28 (4) and 28AA upheld on appeal.

Penalty includes customs duty, interest, and matching penalty amount.

Company states no material impact expected on financials or operations.

Plans to legally challenge the order through available judicial mechanisms.

The ruling reflects ongoing scrutiny of import duties and compliance by customs authorities.

Sources: The Economic Times, Business Standard, Economic Times Legal​