Colgate Palmolive (India) Limited has disclosed receiving a significant tax demand from the Income Tax Department, marking a major regulatory development for the consumer goods company. The assessment order, received on December 24, 2025, pertains to the financial year 2021-22 and carries substantial financial implications.

Assessment Order Details

The Income Tax Department has issued an assessment order under Section 143(3) read with Section 144C(13) and Section 144(B) of the Income Tax Act, 1961, along with a Notice of Demand under Section 156. The following table outlines the key parameters of the tax demand:

Primary Reasons for Tax Demand

The substantial tax demand of ₹267.64 crores has been raised primarily on two key grounds:

• Transfer Pricing Adjustments: The major portion of the demand stems from transfer pricing adjustments made by the tax authorities
• Expense Disallowances: Certain expenses claimed by the company have been disallowed by the Income Tax Department

The assessment order specifically covers the financial year 2021-22, corresponding to Assessment Year 2022-23, indicating a comprehensive review of the company's tax filings for that period.

Company's Response and Impact Assessment

Colgate-Palmolive (India) Limited has maintained that the assessment order will not affect its business operations. The company has categorically stated that there is no impact on financials, operations, or any other activities due to the said order. This suggests the company views the demand as a procedural matter that can be addressed through appropriate legal channels.

The regulatory filing indicates that no penalties, restrictions, or sanctions have been imposed pursuant to the communication, and no aberrations or non-compliances have been identified by the authority beyond the transfer pricing and expense disallowance issues.

Legal Course of Action

The company has outlined its immediate response strategy to challenge the assessment order:

The company plans to file an appeal before the Income Tax Appellate Tribunal against the assessment order, which is a standard legal recourse available to taxpayers who disagree with tax authorities' decisions.

Regulatory Compliance and Disclosure

The disclosure has been made in compliance with Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company noted that the assessment order was received on the evening of December 24, 2025, and since December 25, 2025, was a public holiday, the intimation to stock exchanges was submitted on December 26, 2025.

This regulatory filing demonstrates the company's commitment to maintaining transparency with stakeholders regarding material developments that could potentially impact investor interests, even when the company believes there will be no operational or financial impact.

Colgate Palmolive , a leading consumer goods company, has reported a slowdown in demand within the Indian market, particularly in urban areas. This development has been highlighted by a company executive, indicating potential challenges for the firm's operations in one of its key markets.

Urban Market Challenges

The company has identified a trend of sluggish demand, specifically in India's urban regions. This observation is significant as urban areas typically represent a substantial portion of consumer goods sales due to higher population density and purchasing power.

Impact on Business Operations

The slowdown in urban demand is reportedly affecting Colgate Palmolive's business operations in India. While specific details of the impact were not provided, such trends can potentially influence various aspects of a company's performance, including sales volumes, revenue, and market strategies.

Broader Market Implications

This development may have wider implications for the consumer goods sector in India:

• It could signal a broader economic trend affecting urban consumption patterns.
• Other companies in the fast-moving consumer goods (FMCG) sector might be experiencing similar challenges.
• The situation might prompt companies to reassess their marketing and distribution strategies in urban areas.

As the situation evolves, market observers and investors will likely keep a close watch on how Colgate Palmolive and other consumer goods companies adapt to these changing market dynamics in India.