Pernod Ricard withdraws Court challenge against India’s US$314M tax demand

INDIA – French spirits maker Pernod Ricard has withdrawn its court challenge against India’s US$314 million tax demand over alleged underpayment of import duties on Scotch whisky, opting instead to pursue a statutory appeal as the four-year investigation enters a new phase. 

The Delhi High Court dismissed the case after the company chose to withdraw its petition, according to a court order released on Monday. The order stated that the case “is dismissed as withdrawn,” allowing Pernod Ricard to seek redress through the tax authority’s appeals process rather than continuing its legal challenge before the court. 

The tax demand was first issued in September last year after Indian authorities accused Pernod Ricard of undervaluing its Scotch whisky imports over several years, allegedly reducing the tariffs payable on the products.  

Reuters previously reported that investigators claimed the company concealed details about the composition of its whisky imports and the age of its blends, thereby lowering its liability under India’s 150% import tariff on Scotch whisky. 

Pernod Ricard had asked the Delhi High Court to quash the tax demand, arguing that investigators failed to provide evidence gathered during the investigation, limiting the company’s ability to defend itself. 

According to the court order, the Indian government did not oppose the company’s decision to withdraw the petition. Government counsel Anurag Ojha told Reuters, “Pernod is now expected to file an appeal with a commissioner within the tax authority.” 

Investigators also alleged that Pernod Ricard had “intentionally complicated” its disclosures by introducing new internal codenames for its malt whisky, making it more difficult to detect the alleged undervaluation. 

Pernod Ricard has consistently denied the allegations. According to Reuters, the company previously said it “rejects any suggestion of wrongdoing” and remains confident in its position. 

India is Pernod Ricard’s largest market by volume, accounting for approximately 10% of the group’s global sales. If the company ultimately loses the tax dispute, total liabilities, including penalties, could exceed US$600 million—equivalent to about one-fifth of its US$2.9 billion revenue in India last year. 

The tax investigation adds to Pernod Ricard’s broader regulatory challenges in India, where the company is also contesting a separate antitrust case and a Delhi government ban related to alleged liquor policy violations, allegations the company has denied. 

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