Diageo's India unit searched as state tax officials review Scotch imports

United Spirits, the Indian subsidiary of Diageo, was searched by Maharashtra tax authorities due to an investigation. The authorities are probing the misclassification of Scotch imports to determine if companies paid lower tariffs. United Spirits previously faced scrutiny from the Directorate of Revenue Intelligence in an industry-wide inquiry. Despite the searches, the company stated there was no impact on its financial and operational activities.

United Spirits, the Indian unit of liquor giant Diageo, said on Friday that it was searched by tax authorities from the western Indian state of Maharashtra, amid an investigation into misclassification of Scotch imports.

* Maharashtra's Commissioner of State Tax initiated the search on October 19 and concluded on Thursday, the company said.

* United Spirits added that there was no impact on financial or operational activities due to the search.

* The company did not provide details around the reason for the search or on which premises it was conducted.

* United Spirits had earlier said it had been searched by the Directorate of Revenue Intelligence as part of an "industry-wide exercise" on October 16.

* The Indian tax authority is looking into whether liquor giants

Pernod Ricard and Diageo wrongly classified some bulk Scotch imports, allowing them to pay lower tariffs, Reuters exclusively reported earlier this month.

* The tax department is concerned that companies are wrongly classifying ⁠bulk Scotch concentrates as products eligible for lower tariffs under the

India-UK trade pact, Reuters reported.

* Under ⁠the trade pact, which took effect on July 15, India agreed to halve import taxes on some Scotch imports to 75% from 150%.

* United Spirits posted lower second-quarter profit on Wednesday.