Nestle India Limited announced on Wednesday that it will face a customs duty penalty amounting to ₹69.45 lakh after the Appellate Authority upheld a decision made under the Customs Act, 1962. The ruling arises from a customs duty dispute where the company previously contested a judgment by the Deputy Commissioner of Customs but had its appeal rejected.

Details of the Penalty

The penalty order, issued under Section 28 (4) in conjunction with Section 28AA of the Customs Act, affirms the demand for customs duty alongside accrued interest and an equivalent penalty. Following the unfavorable ruling, Nestle India communicated through a stock exchange filing that they are considering various options to contest this order. The company emphasized that this penalty will not materially affect its financials, operations, or other business activities.

Current Market Position

As of Wednesday, shares of Nestle India closed at ₹2,240.10 on the Bombay Stock Exchange (BSE), reflecting a steady market presence despite the ongoing regulatory challenges.

SEBI’s Cautionary Letter

In a related development, the Securities and Exchange Board of India (SEBI) has issued a cautionary letter to Nestle India concerning an alleged insider trading violation linked to a senior official within the company. This communication, sent to Nestle India’s Compliance Officer on March 6, 2025, pertains to a “contra trade” executed by a designated individual.

SEBI regulations strictly prohibit such trades, wherein an insider transacts shares within six months of a prior transaction involving the same security, as it may exploit unpublished price-sensitive information.

Nestle India confirmed receipt of this letter and stated that the matter does not have any significant impact on their financial or operational activities.

Upcoming Price Adjustments

To address rising costs associated with key commodities such as coffee, cocoa, and edible oils, Nestle India is planning to implement a slight increase in product prices. This move is part of their broader strategy to maintain profitability while responding to changing market conditions.