By RJ Whitehead 06-Mar-2013
Almost exactly a year ago, Cadbury India was showing off its position as the country’s fourth most admired company, according to Fortune magazine; but today the chocolate major is preparing to fight accusations from tax authorities that it had deliberately set out to dupe the treasury out of Rs252 crore (US$45m).
The story, broken by Forbes India, revolves around Cadbury’s Baddi manufacturing unit in Himachal Pradesh. The authorities suggest this has been a “phantom factory” that has pretended to produce chocolate and sweets since 2010, and say as much in a 103-page report that accuses Cadbury of manipulating invoices and other documents to gain tax exemption.
This exemption applies to any company that began production in a new plant in the northern state by March 31, 2010. For its part, Cadbury India emphatically denies the allegations, saying the company plans to contest the allegation as its executives “acted in good faith based on legal advice in the decision to claim excise benefit in respect of our plant in Baddi”, Forbes reported.
Delayed by red tape
However, according to the Directorate of General Excise Intelligence, there is no way that Cadbury could have begun operations by the HP deadline because government agencies were still reviewing approvals for the site.
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