Colgate-Palmolive (India), a leading manufacturer of oral care products, has received a Transfer Pricing Order from Income Tax authorities, totaling Rs 170 crore, for specific international transactions in the financial year 2021-22. Transfer Pricing involves setting the prices for transactions between related entities across borders.
The company intends to bring this matter before the ‘Dispute Resolution Panel’ (DRP) and is currently awaiting the conclusion of the assessment proceedings, as confirmed in regulatory updates on Monday evening. Colgate-Palmolive (India) Ltd stated, “The company is awaiting the completion of the Draft Assessment proceedings, and after that, an application will be made before the Dispute Resolution Panel (DRP).”
The Assessing Authority has disallowed certain international transactions conducted by the company. Nevertheless, Colgate-Palmolive (India) emphasized that this Transfer Pricing Order has no impact on the company’s financials, operations, or other activities.
The Dispute Resolution Panel (DRP) serves as an Alternative Dispute Resolution (ADR) mechanism for addressing disputes related to Transfer Pricing in international transactions. In a separate development last week, Colgate-Palmolive India reported a 22.31 percent increase in net profit, reaching Rs 340.05 crore for the September quarter. Additionally, its sales witnessed a 6.09 percent increase, reaching Rs 1,462.38 crore.