India has accused Cadbury PLC of dodging about $46 million in taxes by pretending to produce candy at a factory that didn't exist.

A 103-page report by the country's tax authorities, which was reviewed by The Wall Street Journal, accuses Cadbury's Indian unit of manipulating invoices and other documents to get a tax exemption available to companies that began production in new plants in the northern Indian state of Himachal Pradesh by March 31, 2010.

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