Key facts
- Indian tax officials are investigating Pernod Ricard and Diageo over Scotch import classifications.
- The probe centers on whether companies wrongly used lower tariffs from the India-UK trade pact.
- Inspectors visited Pernod's India headquarters and searched Diageo's offices.
- The tax department argues duty relief does not apply to bulk concentrates.
- India's trade pact with the UK reduced certain Scotch import taxes to 75% from 150%.
Indian tax officials are investigating liquor companies Pernod Ricard and Diageo for allegedly misclassifying bulk Scotch imports to take advantage of lower tariffs under the recent India-UK trade pact. Inspectors visited Pernod's India headquarters and searched Diageo's offices as part of the probe. The tax department believes the duty relief does not apply to bulk concentrates, which are used to produce brands like Royal Stag and Blenders Pride. The India-UK trade pact, effective July 15, reduced import taxes on certain Scotch to 75% from 150%. The UK accounts for about 75% of India's imported spirits market, primarily Scotch whisky.