Pernod Ricard Withdraws Court Challenge Against $314 Million India Tax Demand, Opts for Statutory Appeal
French spirits giant Pernod Ricard has withdrawn its legal challenge before the Delhi High Court against a $314 million (approximately ₹2,600 crore) tax demand issued by Indian customs authorities, choosing instead to pursue a statutory appeal under the country’s tax framework. The move marks a significant development in a long-running dispute over the valuation of imported Scotch whisky into India.
The Delhi High Court dismissed the company’s petition as withdrawn after Pernod informed the court that it would avail itself of the alternative appellate mechanism available under customs law. Government counsel stated that the authorities had no objection to the withdrawal, paving the way for the company to contest the demand before the designated tax appellate authority.
The tax dispute stems from a four-year investigation by Indian customs officials, who allege that Pernod Ricard undervalued Scotch whisky imports by failing to fully disclose details such as the composition of blends and their age. Investigators contend that these omissions significantly reduced the customs value of imported products, enabling the company to pay lower import duties despite India’s high tariff regime on alcoholic beverages.
Pernod Ricard has consistently denied any wrongdoing. The company has maintained that it complied with applicable laws and previously argued before the High Court that investigators did not provide key materials and evidence collected during the inquiry, thereby limiting its ability to effectively defend itself. Despite withdrawing the writ petition, the company continues to contest the tax assessment through the statutory appellate process.
The financial implications of the dispute remain substantial. While the principal tax demand stands at $314 million, potential penalties could push Pernod Ricard’s total liability beyond $600 million if the company ultimately loses the case. Such an outcome would represent a major financial exposure in India, which contributes roughly 10% of the group’s global sales and remains its largest market by volume.
The tax case adds to a series of regulatory and legal challenges facing Pernod Ricard in India. The company is already contesting investigations relating to alleged competition law violations and Delhi’s liquor licensing policy, both of which it has denied. Despite these legal headwinds, India continues to be a strategically critical market for the French liquor maker, whose portfolio includes globally recognized brands such as Chivas Regal, Absolut Vodka, Ballantine’s and The Glenlivet.
