SABMiller is embroiled in a dispute with tax authorities in India over the brewer's acquisition of the Foster's lager business in the country.

Indian tax officials are examining why SABMiller did not pay tax on the US$120m acquisition, completed in 2006.

Both SABMiller and Foster's Group, based in Australia, are understood to have argued that there is no tax obligation because the deal was settled outside of India, beyond the tax authorities' jurisdiction.

"SABMiller believes there is no tax liability regarding its Foster's acquisition," an SABMiller spokesperson told just-drinks today (2 December). "We continue to vigorously make that case," he said.

A report in India's Economic Times newspaper this week said that Foster's is set to go before Delhi High Court in January to argue against a tax on the deal with SABMiller. The paper added that SABMiller may face a charge of more than INR600m (US$13m).

Foster's and Peroni Nastro Azzurro make up SABMiller's super-premium lager portfolio in India, where the brewer is the second largest player behind United Breweries.

SABMiller saw beer sales by volume slip 21% in India in the six months to the end of September, compared to the same period last year.