Nestle India is facing a tax penalty of Rs 69.45 lakh after the Appellate Authority upheld a previous order related to customs duty. This penalty stems from a long-standing dispute between the company and the Deputy Commissioner of Customs. Initially, Nestle India had appealed against the decision, hoping to avoid paying additional customs duty. However, the appeal was rejected, and the earlier demand for customs duty, interest, and an equal penalty amount has now been confirmed.
The penalty order was issued under Section 28 (4) and Section 28AA of the Customs Act, 1962. Despite challenging the ruling, Nestle India was unsuccessful in reversing the decision, which went in favor of the Revenue Department.
In its official statement to the stock exchange, Nestle India clarified that the tax penalty will not have any serious impact on its financial health, business operations, or overall activities. The company is currently exploring various options to challenge the ruling further, indicating that the case may not be closed yet.
Shares of Nestle India were reported to have closed at Rs 2,240.10 per share on the Bombay Stock Exchange (BSE) on the same day the penalty news was disclosed.
SEBI Sends Warning to Nestle India
In addition to the customs duty penalty, Nestle India recently found itself under scrutiny from the Securities and Exchange Board of India (SEBI). The market regulator issued a cautionary warning to the company, pointing out an alleged violation of insider trading rules.
This warning, addressed to Nestle India’s Compliance Officer (CCO), was sent by SEBI’s Deputy General Manager. According to the report, the violation involved a “contra trade” carried out by a senior company official. Contra trades refer to cases where a person buys or sells company shares and then makes another trade in the opposite direction within six months.
SEBI prohibits such short-term trading practices to prevent the misuse of insider information that is not yet available to the public.
Nestle India confirmed that it had received SEBI’s cautionary letter on March 6, 2025. However, the company assured investors that the warning had no impact on its financial status, operations, or market position.
Price Increase Planned to Tackle Rising Costs
At the same time, Nestle India is planning to increase the prices of some of its products. This step has been taken due to rising costs of key raw materials such as coffee, cocoa, and edible oil.
The company has not yet announced the exact price changes or which products will be affected. However, it indicated that the move was necessary to manage inflationary pressures and protect its profit margins.
Despite the recent challenges, Nestle India remains one of the top players in the food and beverage sector in India. The company continues to assure its investors and consumers that it is taking steps to handle these issues efficiently. With further appeals planned for the tax penalty and a careful approach to SEBI’s cautionary warning, Nestle India is striving to maintain stability and focus on long-term growth.
