March 5 Cadbury Plc, now part of Mondelez
International Inc, used a nonexistent factory in India
to avoid about $46 million in taxes, the Wall Street Journal
reported on Tuesday, citing a report by the Indian tax
Cadbury's Indian unit manipulated invoices and other
documents to get an exemption from taxes available to companies
that began production in new plants in the northern Indian state
of Himachal Pradesh by March 31, 2010, the Journal said.
The Directorate General of Central Excise Intelligence,
which conducted the investigation, concluded that the factory
could not have existed by the deadline as the company had not
received the necessary approvals from government agencies, the
Mondelez is reviewing the content of the show-cause notice
from India's excise department, spokesman Michael Mitchell told
Reuters in an emailed statement.
"We have been fully cooperating with the authorities on this
enquiry," Mitchell said.
Tax officials in India could not be reached for comment
outside regular business hours.
India had said in November it was investigating the local
unit of Cadbury, saying the company may have evaded as much as 2
billion Indian rupees ($36.47 million) in taxes.
India is aggressively pursuing tax claims against
multinational firms operating in the country as the government
seeks to rein in its budget deficit.
Anglo-Dutch oil major Royal Dutch Shell's Indian
unit has been accused of undervaluing a share sale to its
overseas parent in 2009 by $2.7 billion.
Vodafone, the largest corporate investor in India,
has repeatedly clashed with Indian authorities over taxes since
it bought Hutchison Whampoa's local mobile business in
Cadbury was acquired by Kraft Foods Inc in 2010 in a $19
billion deal. Kraft then spun off its North American grocery
business as Kraft Foods Group.
Mondelez is the name of what remains of Kraft Foods Inc
after the spinoff. Its brands include Oreo cookies, Cadbury
chocolate and Trident gum.
Kraft is also under investigation in India on whether it
needed to pay taxes arising from its $19 billion takeover of