Cadbury was reviewing the contents of the show-cause notice and was cooperating fully with the Indian authorities, a spokesperson said. Photo: Hemant Mishra/Mint
Live Mint :Wed, Mar 06 2013. 12 59 AM IST
Cadbury’s Indian unit manipulated invoices and other documents to get an exemption from taxes, says the report
Cadbury Plc, now part of Mondelez International Inc, used a non-existent factory in India to avoid about $46 million (around Rs.250 crore today) in taxes, the Wall Street Journal reported on Tuesday, citing a report by the Indian tax authorities.
Cadbury’s Indian unit manipulated invoices and other documents to get an exemption from taxes available to companies that began production in new plants in the northern state of Himachal Pradesh by 31 March 2010, the Journal said.
The Directorate General of Central Excise Intelligence, which conducted the investigation, concluded that the factory could not have existed by the deadline as the company had not received the necessary approvals from government agencies, the Journal said.
Mondelez is reviewing the content of the show-cause notice from India’s excise department, spokesman Michael Mitchell told Reuters in an emailed statement.
“We have been fully cooperating with the authorities on this enquiry,” Mitchell said.
Tax officials in India could not be reached for comment outside regular business hours.
India had said in November it was investigating the local unit of Cadbury, saying the company may have evaded as much as Rs.200 crore in taxes.
India is aggressively pursuing tax claims against multinational firms operating in the country as the government seeks to rein in its budget deficit.
Anglo-Dutch oil major Royal Dutch Shell’s Indian unit has been accused of undervaluing a share sale to its overseas parent in 2009 by $2.7 billion.
Vodafone, the largest corporate investor in India, has repeatedly clashed with Indian authorities over taxes since it bought Hutchison Whampoa’s local mobile business in 2007.
Cadbury was acquired by Kraft Foods Inc in 2010 in a $19 billion deal. Kraft then spun off its North American grocery business as Kraft Foods Group. REUTERS
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