Indian tax authorities have accused the local unit of chocolate giant Cadbury of evading $46 million in taxes by pretending to produce sweets at a factory that did not exist, a report said Wednesday.
Cadbury India manipulated invoices and other documents to get a tax exemption for companies that began production in new plants in the northern state of Himachal Pradesh by March 31, 2010, the Wall Street Journal reported.
But the Directorate General of Central Excise Intelligence, which conducted the investigation, concluded that the plant could not have existed by 2010 as the company had not received the necessary government approvals, the WSJ said.
Cadbury India, controlled by international snacks maker Mondelez International, said it was "reviewing" the notice from the tax authorities and will respond within the 30-day period granted to it.
"We have been fully cooperating with the authorities on this enquiry. Since the process is currently under way, it will be inappropriate on our part to discuss the details at this time," the firm said in a statement to AFP.
India has aggressively stepped up its tax collection drive against multinational firms operating in the country, in a bid to raise revenue and reduce a ballooning fiscal deficit.
Anglo-Dutch oil giant Royal Dutch Shell's Indian unit faces a local tax claim on a share sale in 2009.
British mobile network firm Vodafone is fighting a multi-billion dollar tax bill from Indian tax authorities over its 2007 purchase of a stake in a domestic telecommunications company.
Vodafone maintains it is not liable to pay any tax on the transaction.