Legal records reveal that Indian authorities have requested a court to reject Pernod Ricard’s request to suspend the process around a $244 million tax demand, charging the French spirit giant with being a “habitual litigator” and planning to “defraud” the country.
The Indian customs authority filed a court document in Mumbai on October 3 that was previously unreported. This document highlights the growing disagreement between Prime Minister Narendra Modi’s administration and Pernod’s local unit over how the company valued some of its imports for more than a decade.
According to the customs agency, Pernod took this action to avoid paying import taxes in full.
The conflict arises as Pernod Ricard experiences economic and regulatory pressure in India, one of its key growing areas, where it holds a 17% market share. It earlier informed Modi that ongoing disagreements over the price of imported alcoholic beverages have “inhibited new investments” in India.
Pernod filed a legal challenge after India requested unpaid taxes from the producer of Absolut and Chivas Regal vodka in June, claiming the inquiry should be halted since it was based on false industry data and the procedure was “neither fair nor rational.”
India’s customs office said in a 43-page petition from October that the French company was using “delay tactics” by asking a court for relief rather than replying to the government’s notice of a tax demand.
It alleged a plot “to rob the Government of India of its legal revenue” by the corporation.
The filing also noted that Pernod has a history of being “a frequent litigant and consistently attempts to abuse the due process of law,” a reference to some earlier tax demands that Pernod had contested in India.
