Maharashtra tax authorities searched the premises of United Spirits, the Indian subsidiary of global liquor company Diageo, between October 19 and October 29 as part of an investigation linked to the classification of bulk Scotch imports.
The company disclosed that the search was initiated by the Maharashtra Commissioner of State Tax on October 19 and concluded on October 29. United Spirits said it cooperated with the authorities and that the exercise had no impact on its financial or operational activities.
The latest search adds another layer to the scrutiny facing Diageo and French liquor company Pernod Ricard over the import classification of Scotch whisky under the India–UK trade agreement.
Maharashtra Search Followed Earlier DRI Operation
United Spirits had previously disclosed that the Directorate of Revenue Intelligence (DRI) searched multiple company locations on October 16 as part of what it described as an industry-wide exercise.
That operation was conducted under the Customs Act, 1962. The company said it provided the documents and clarifications requested by the agency and reported no immediate impact on its business.
The Maharashtra search was a separate operation conducted by the state tax department. United Spirits did not disclose the specific premises searched or provide details of the questions raised by officials.
The company said it would continue cooperating with the authorities.
Investigation Centres On Bulk Scotch Import Classification
The wider investigation concerns whether Diageo and Pernod Ricard incorrectly classified bulk Scotch whisky concentrates to claim lower import duties under the India–UK trade agreement.
The agreement took effect on July 15, 2026, and reduced import duties on certain Scotch products from 150% to 75%. Indian tax officials are examining whether bulk Scotch concentrates qualify for the reduced rate or should continue to attract the higher duty.
Both companies import Scotch concentrates in bulk and blend them with other ingredients in India to manufacture popular domestic liquor brands.
The investigation gained attention after tax officials visited Pernod Ricard’s Indian headquarters and questioned executives about its imports. Both companies have said they are cooperating with authorities.
No final finding of wrongdoing or tax liability has been announced against United Spirits in connection with the latest search.
United Spirits Reports No Business Disruption
The company said the Maharashtra tax authorities’ search did not affect its financial or operational activities.
The development comes as United Spirits faces pressure in parts of its business. Its second-quarter results showed a decline in profit and weaker sales in its popular liquor segment, with the company citing regulatory changes and higher taxes on non-local brands in Maharashtra among the factors affecting performance.
The outcome of the import-classification investigation could have financial implications if authorities determine that the companies claimed tariff benefits on products that were not eligible. However, the amount of any potential tax demand, if one arises, has not been disclosed.
What This Means For You
The investigation could affect the cost structure of liquor companies that import Scotch concentrates and manufacture blended products in India.
If authorities decide that bulk concentrates do not qualify for the reduced tariff, companies could face higher import costs or potential demands for additional duties. Those costs may influence pricing and business decisions across the spirits industry.
For now, the search itself does not establish that United Spirits violated customs or tax rules. The financial implications will depend on the findings and any subsequent action by the authorities.
