Marico Limited on Thursday informed the stock exchanges that the Income Tax Department has completed its survey action conducted at some of the company’s offices and manufacturing units in India. The Income Tax survey on FMCG major Marico represents a significant regulatory development that has captured market attention and investor focus across the consumer goods sector.
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In its filing under Regulation 30 of the SEBI Listing Obligations and Disclosure Requirements, the FMCG major said it had extended full co-operation during the entire process. This comprehensive survey action under Section 133A of the Income Tax Act, 1961, was conducted across multiple locations, demonstrating the department’s thorough approach to regulatory compliance verification.
Understanding the Section 133A Survey Framework
The Income Tax survey on FMCG major Marico was conducted under Section 133A of the Income Tax Act, which grants specific powers to tax authorities for verification purposes. A survey under Section 133A of the Income Tax Act is different from a search operation. While its scope is more limited, the Income Tax Department can examine books of accounts, documents, and business operations during such proceedings.
This regulatory mechanism allows tax officials to verify compliance without the extensive powers associated with search operations. The survey methodology enables authorities to cross-verify financial records, examine business transactions, and ensure adherence to tax regulations across various operational levels.
Scope and Scale of the Investigation: The
Income Tax Department conducts a survey at Marico offices across India involving 200+ officers, indicating the comprehensive nature of this regulatory action. The Income Tax survey on FMCG major Marico encompassed multiple facilities, including manufacturing units and administrative offices, reflecting the department’s systematic approach to examining the company’s operations.
The Income Tax Department’s Mumbai division coordinated this extensive operation, which covered various aspects of the company’s business activities. The scale of involvement, with over 200 officers participating, underscores the significance of this regulatory examination within the FMCG sector.
Company’s Financial Performance and Market Position
As per a company statement, during the 2024-25 fiscal year, it recorded a turnover of USD 1.3 billion through its products sold in India and chosen markets in Asia and Africa. This substantial revenue base positions Marico as a significant player in the consumer goods market, making the Income Tax survey on FMCG major Marico particularly noteworthy from a regulatory perspective.
Marico closed FY25 with consolidated sales of Rs 10,831 crore, up 12% year-on-year, with underlying volume growth of 5%. Net profit rose 10% year-on-year to Rs 1,658 crore. These robust financial metrics demonstrate the company’s strong market performance, which likely contributed to the tax department’s interest in conducting a comprehensive survey.
Market Response and Stock Performance
Market Response and Stock PerformanceThe announcement of the Income Tax survey on FMCG major Marico initially triggered market volatility. Marico shares declined as much as 1.5 per cent to Rs 713 apiece on BSE after the news, reflecting investor concerns about potential regulatory implications.
However, following the conclusion announcement, the FMCG stock rose 5.41 per cent to hit a high of Rs 735.25. It was later trading at Rs 722.40, up 3.57 per cent. This positive market response indicates investor confidence in the company’s compliance standards and the satisfactory conclusion of the survey process.
Brand Portfolio and Business Impact
The Income Tax survey on FMCG major Marico encompassed the company’s entire operations, including its flagship brands. Confirming the surprise survey, an Income Tax Department spokesperson said the operation is probing charges of tax evasion by Marico, with particular attention to popular brands like Parachute and Saffola.
Marico is one of India’s leading consumer goods companies operating in the global beauty and wellness categories. The survey’s scope included examination of various product lines, distribution networks, and revenue streams across different market segments.
Regulatory Compliance and Cooperation
Throughout the Income Tax survey on FMCG major Marico, the company maintained transparency and cooperation with regulatory authorities. The comprehensive nature of the examination required detailed documentation review, financial record verification, and operational assessment across multiple business units.
The survey process involved a systematic examination of tax compliance across various operational levels, including manufacturing operations, distribution networks, and administrative functions. This thorough approach ensured comprehensive coverage of all business activities under the regulatory framework.
Industry Implications and Broader Context
Industry Implications and Broader ContextThe Income Tax survey on FMCG major Marico occurs within the broader context of enhanced regulatory scrutiny across the consumer goods sector. Personal care items such as toothpaste, shampoos, soaps, and hair oil, now attract only 5 per cent GST after the recent GST reform, against 12–18 per cent, highlighting ongoing tax policy developments affecting the industry.
This regulatory action reflects the government’s commitment to ensuring tax compliance across major FMCG companies, particularly those with significant market presence and revenue generation. The comprehensive nature of such surveys demonstrates the authorities’ systematic approach to regulatory oversight.
Expert Analysis and Market Outlook
However, experts believe that the company’s fundamentals remain strong, and long-term investors need not panic. The successful conclusion of the Income Tax survey on FMCG major Marico without material updates reinforces confidence in the company’s compliance standards and operational integrity.
The IT survey on Marico is being closely tracked by both the stock market and regulatory observers, marking it as a significant corporate development. This attention underscores the importance of such regulatory actions in maintaining market transparency and investor confidence.
Conclusion and Future Implications
The completion of the Income Tax survey on FMCG major Marico represents a significant milestone in regulatory compliance verification. The successful conclusion without requiring material updates demonstrates the company’s adherence to tax regulations and operational transparency.
This comprehensive examination sets important precedents for regulatory compliance within the FMCG sector, reinforcing the importance of maintaining robust financial controls and transparent business practices. The market’s positive response following the conclusion announcement reflects restored investor confidence and validation of the company’s compliance standards.
The Income Tax survey on FMCG major Marico ultimately strengthens the regulatory framework’s effectiveness while confirming the company’s commitment to maintaining the highest standards of tax compliance and operational integrity across its diverse business operations.
