Colgate Palmolive Faces Rs 170 Crore Transfer Pricing Order

Colgate-Palmolive (India), a leading manufacturer of oral care products, has encountered a Rs 170 crore Transfer Pricing Order issued by Income Tax authorities concerning specific international transactions. This order pertains to the financial year 2021-22.

Understanding Transfer Pricing

Transfer Pricing involves determining the pricing for transactions between related entities across different borders.

Company’s Response

In response to the Transfer Pricing Order, Colgate-Palmolive (India) has stated that it will present the matter before the Dispute Resolution Panel (DRP) once the assessment proceedings are concluded. The company highlighted this development in its regulatory updates released on Monday evening.

“The company is awaiting completion of the Draft Assessment proceedings and post the same, an application will be made before the Dispute Resolution Panel (DRP),” it mentioned.

The Assessing Authority has specifically disallowed certain international transactions conducted by the company, as per the updates.

Impact and Assurance

Despite the Transfer Pricing Order, Colgate-Palmolive (India) reassured stakeholders that there would be no adverse impact on its financial, operational, or other activities.

Dispute Resolution Mechanism

The Dispute Resolution Panel (DRP) serves as an Alternative Dispute Resolution (ADR) mechanism, particularly addressing disputes related to Transfer Pricing in international transactions.

Financial Performance Update

Separately, last week, Colgate-Palmolive India reported a notable 22.31% increase in net profit, amounting to Rs 340.05 crore for the September quarter. The company also experienced a 6.09% rise in sales, reaching Rs 1,462.38 crore during the same period.