Govt investigating Cadbury India in tax evasion case

NEW DELHI Thu Nov 22, 2012 3:44pm IST

1 of 2. Workers protest after attending a union campaign launch at the Cadbury factory in Bournville, central England, December 15, 2009.

Credit: Reuters/Darren Staples/Files

Related Topics

Stocks

   

NEW DELHI (Reuters) - Authorities in India are investigating the local unit of chocolate maker Cadbury over allegations the company may have evaded as much as 2 billion rupees in taxes, the Minister of State for Finance said on Thursday, as the country beefs up its efforts to increase revenues to contain a widening fiscal deficit.

"Two cases of tax evasion by Cadbury India Ltd have been detected by the Directorate General of Central Excise Intelligence during the years 2009-10 to 2012-13, up to 31st October, 2012," the minister, S.S. Palanimanickam, told parliament in a written reply to questions from lawmakers.

This is the second time in as many years Cadbury has run into trouble with Indian authorities. Last year, an investigation was launched to determine whether Kraft Foods Inc (KRFT.O) needed to pay taxes arising from its $19 billion takeover of Cadbury. That probe is ongoing.

The latest of the two cases against Cadbury's India unit, which is controlled by Mondelez International Inc (MDLZ.O), involves alleged evasion of central excise duty, or factory gate tax at a company facility in Himachal Pradesh.

The Economic Times newspaper carried a Press Trust of India report earlier this month that Cadbury had "wrongfully" claimed an area-based tax exemption for its unit in Himachal Pradesh. That report said the amount involved about 1 billion rupees.

A spokesman for Cadbury India said the company was "fully cooperating" with authorities.

"Since the investigation currently is underway, it will be inappropriate on our part to discuss the details at this time," the spokesman said in an emailed statement.

Tax officials were not immediately available for comment.

Kraft Foods Inc last month spun off its North American grocery business as Kraft Foods Group. Mondelez International is the name of what remains from Kraft Foods Inc after the spinoff. Its brands include Oreo cookies, Cadbury chocolate and Trident gum. (Additional reporting by Anurag Kotoky, Devidutta Tripathy and Nandita Bose; editing by Tony Munroe)

FILED UNDER:
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (1)
CommunalAward wrote:
Cadbury India should have bribed Finance Ministry

Nov 23, 2012 12:04pm IST  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Markets

REUTERS SHOWCASE

Canada Shooting

Canada Shooting

Attack on parliament, killing of soldier stun Canada's capital.  Full Article 

Earnings Season

Earnings Season

Wipro sees rosier end to year as U.S. clients spend.  Full Article 

Business Climate

Business Climate

Fears for tough penalties grow as India cleans up business  Full Article 

New Email Service

New Email Service

Google launches new email service dubbed "Inbox".  Full Article 

DLF Appeals

DLF Appeals

DLF seeks interim relief from capital market ban  Full Article 

Falling Oil Prices

Falling Oil Prices

Indian consumers respond to softer oil, food prices  Full Article 

Book Keeping

Book Keeping

RBI fires warning shots on companies' lack of FX hedging.  Full Article 

Policy Repo Rate

Policy Repo Rate

Most external members suggested rate cut in RBI's Sept review.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage