Supreme Court Ends Rs. 101.21 Crore Licensing Fee Case Against Nestlé India; Tax Dept's Appeals Dismissed:

Supreme Court Ends Rs. 101.21 Crore Licensing Fee Case Against Nestlé India; Tax Dept's Appeals Dismissed On Wednesday, the Supreme Court of India dismissed the appeals of the Income Tax Department filed against the FMCG major Nestle India. The appeals were related to the disallowance of general licensing fees amounting to Rs. 101.21 crore for multiple financial years. The apex court had dismissed these appeals of the tax department as withdrawn vide an order dated January 13, 2026, received by the company on January 21, 2026. The company disclosed this information through a regulatory filing dated January 21, 2026, addressed to the stock exchange. The company stated that the present matter is related to the financial years 1996-1998, 1999-2001, and 2004-2008. The income tax department alleged that the company set excessive and unreasonable licensing fee payments during these periods and hence challenged the same before the Supreme Court.

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Nestle India challenged the tax disallowance orders, and the case went through multiple courts. The company received favourable decisions from the Delhi High Court. The tax department thereafter took the matter before the Supreme Court by filing a group of combined civil appeals. The appeals were withdrawn after the Additional Solicitor General, representing the Income Tax Department, told the Supreme Court that she had approval to withdraw the cases. The benches, comprising Justice B.V. Nagarathna and Justice Ujjal Bhuyan, admitted this request and dismissed all the pending applications, resulting in the closure of the matter completely.

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The key dispute in the case concerned Rs. 101.21 crore in general licensing fees, also known as royalty payments, paid by Nestlé India to its Swiss parent entity, Société des Produits Nestlé S.A. This payment was made for the use of intellectual property, brands, patents, manufacturing processes, technical know-how, and operational support.