Indian tax officials investigate Pernod Ricard and Diageo over alleged bulk Scotch misclassification as inspectors say pact’s 75% tariff cut does not apply

Indian tax officials are investigating Pernod Ricard and Diageo over allegations that they misclassified bulk Scotch imports to pay lower tariffs under the India-UK trade pact.

The Directorate of Revenue Intelligence visited both companies’ offices last week and reviewed documents. Inspectors argue the pact’s reduction in duty from 150% to 75% does not cover the bulk Scotch concentrates the companies import and blend into brands including Royal Stag, Blenders Pride and McDowell’s.

The companies say they have imported the concentrates in line with Indian law for years.