SABMiller, Fosters Group fight India tax charge

SABMiller, Foster's Group fight India tax charge

SABMiller has lodged an appeal against India's tax authorities over a claim for US$42m in relation to the brewer's acquisition of Foster's' Indian beer operations.

Last month, Foster's Group said that it is facing a AUD39.5m (US$42m) tax charge from India's income tax authorities. The case relates to SABMiller's $120m acquisition of the licence to produce Foster's lager in India in 2006.

SABMiller India has been served with the initial charge, but Foster's would likely foot the eventual bill due to an indemnity granted to SABMiller.

Today (13 May), SABMiller confirmed to just-drinks that it has lodged a formal appeal against the tax charge. "SABMiller has applied for rectification of the order passed by the tax officer," a spokesperson for the brewer said.

"It has also lodged two writ petitions before Bombay High Court," the spokesperson said. "One of the writ petitions challenges the jurisdiction of the tax officer and the other challenges the demand notice issued by the tax officer."

An initial hearing took place on 3 May, but the High Court has adjourned the case until a further hearing next month, according to SABMiller.

Both Foster's and SABMiller have argued that there is no tax obligation, because the 2006 deal was settled outside of India, beyond the tax authorities' jurisdiction. "Foster's is confident of the positions that were taken in relation to Indian tax," Foster's said last month.