FMCG Giant Hindustan Unilever Receives Rs 1,986 Crore Tax Demand Notice- Know Why

FMCG major Hindustan Unilever Ltd. (HUL) on Friday, October 31, 2025 announced that the company had received a tax demand notice totalling Rs 1,986 crore from the Mumbai Assistant Commission of Income Tax, as per an exchange filing.

The company in its exchange filing noted, "Assessment Order u/s 143(3)read with Sec. 144C(13) Income Tax Act, 1961 (ITA), along with Notice of Demand of ₹1,986.25 crores u/s 156 of the ITA,” the company informed the exchanges through its filing."

The Mumbai-headquartered tax authority has shown concern over how specific party transactions and corporate tax disallowances were valued, which HUL has allegedly conducted out in the nature of depreciation claimed.

“The Tax authorities have made transfer pricing adjustments in the nature of disallowance of payments to related parties or challenged the valuation of such related party payments and corporate tax disallowances in the nature of depreciation claimed,” as per the exchange filing data.

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How Will HUL Respond To Rs 1,986 Crore Tax Demand Notice?

In the NSE filing, the fast-moving consumer goods company said it intends to file a necessary appeal with the appellate authority to challenge the tax demand notice, which has been imposed for the period of the financial year ending 2020-21.

The company with a market cap of Rs 5,80,208 crore "will file the necessary appeal with the appellate authority in this regard within the permissible timeline,” the company said.

According to the official announcement, this ₹1,986 crore tax demand notice will have “no material impact on financial” or operations of the company.

HUL Share Price Movement 

On Friday, October 31, the share price of Hindustan Unilever ended 0.34% lower at Rs 2,461.20 after  Friday's stock market session as against Rs 2,469.60 at the earlier market close.

The company informed its tax demand order after market operating hours on Friday, 31 October 2025.

HUL shares have given stock market investors more than 18% returns on their investment in the last five years. However, the company's shares have lost 2.65% in the last one-year period.

Meanwhile, the FMCG stock hit its 52-week high level at ₹2,750 on 4 September 2025, while the 52-week low level was at ₹2,136, as per NSE data.