United Spirits Limited, Diageo's Indian unit, is being investigated by Indian tax authorities over how it classifies bulk Scotch imports under the India-UK trade pact, and said its offices were searched in an industry-wide exercise for which it provided documents and clarifications.

United Spirits Limited was identified as a beneficiary after the Karnataka government issued a draft notification for alcohol-content based excise duty, with Karnataka described as a top revenue-generating state for its Prestige and Above portfolio including McDowell's No.1 and Royal Challenge, and brokerage Nuvama maintaining a BUY on the company.