2026-07-22
Pernod Ricard has withdrawn its court challenge against a $314 million tax demand in India tied to alleged undervaluation of Scotch whisky imports, shifting the dispute from the Delhi High Court to the tax appeals system, according to a court order released this week.
The move adds a new turn to a four-year investigation that has become one of the most serious regulatory problems for the French spirits group in one of its most important markets. India accounts for about 10% of Pernod Ricard’s global sales and is the company’s largest market by volume.
The tax demand was issued last September. Indian authorities alleged that Pernod had undervalued Scotch whisky imports over several years by not fully disclosing the composition of imported whisky and the age of certain blends. According to the allegations, that reduced the tariff burden on those imports, which face duties of 150%.
Pernod had asked the Delhi High Court to cancel the demand. In its challenge, the company argued that Indian authorities had not shared investigation data during the probe, information it said could have helped it defend itself. But judges in Delhi wrote in their order that the case was “dismissed as withdrawn” after Pernod chose to pursue what the court described as a statutory alternative remedy through the tax authority’s own appeal process.
The order said the Indian government had no objection to Pernod’s decision to withdraw the case from court. Anurag Ojha, counsel for the government in the matter, told Reuters that Pernod is now likely to file an appeal with a commissioner in the tax authority.
Neither Pernod nor Indian tax authorities responded to Reuters requests for comment on the latest development.
The financial stakes are high. Reuters reported that with penalties included, Pernod’s total exposure in the case could exceed $600 million if it loses. That would amount to roughly one-fifth of its $2.9 billion in revenue from India last year and about three times its profit there.
Indian investigators concluded that Pernod had “intentionally complicated” its disclosures by using new internal malt codenames that made detection by authorities more difficult, according to Reuters. Pernod has previously denied wrongdoing and said it rejects any suggestion that it acted improperly. The company has also said it remains confident in its position.
The dispute comes at a difficult time for Pernod in India. The company is also dealing with an antitrust case and separately is contesting a ban in New Delhi linked to alleged violations of liquor policy rules, accusations it has denied.
For the drinks industry, the case matters beyond one company’s balance sheet. India is one of the world’s biggest spirits markets, and any ruling or administrative decision on how imported Scotch is valued for customs purposes could affect costs, pricing and compliance practices for other liquor companies selling into the country. That could be especially important for producers and importers of premium whisky, where blend composition, age statements and product classification can have a direct effect on duties.
The case also highlights how exposed global drinks groups can be in India, where imported alcohol faces steep tariffs and where state and federal rules can create a complex operating environment. For multinational spirits companies, disputes over valuation are not only legal matters but also commercial ones, because they can influence margins, route-to-market decisions and long-term investment plans.
Pernod’s decision to leave the court route after nine months without a public explanation suggests it now sees a better chance through the administrative appeals channel, or at least a more practical path forward. Whether that leads to a reduction in the demand or simply moves the fight into another forum remains unclear. What is clear is that one of the largest tax disputes facing an international spirits company in India is far from over.