Anti-profiteering notice served on HUL; FMCG, IT firms may move HC

The largest consumer goods company in the country, Hindustan Unilever (HUL), was on Tuesday slapped with a notice by the government’s anti-profiteering body, set up to monitor whether or not firms were passing on benefits of the goods and services tax (GST) to consumers.

While the contents of the notice, issued by the Directorate General of Safeguards (DGS), could not be immediately ascertained, the development comes as companies in fast-moving consumer goods (FMCG) and information technology (IT) sectors propose to move the high courts in Delhi and Mumbai seeking more clarity on the anti-profiteering clause under the GST.

The DGS is the investigative arm of the finance ministry.

The notice to HUL is the DGS’s sixth; it has already issued notices to other firms, such as Lifestyle International, Hardcastle Restaurants, and Pyramid Infratech. Some dealers, such as a Jaipur-based Sharma Trading Company, which sells FMCG products, and a Bareily-based Honda car dealer, were also issued notices.

In a statement, an HUL spokesperson said it was committed to ensuring all benefits under the GST were passed on to consumers. “We have received a notice on 16 January (Tuesday) from the DGS, and we are in the process of ascertaining the full details.”

The spokesperson also said it had accelerated its distribution and trade networks, covering more than 800 stock-keeping units to reduce prices. “Most of these have already landed in the market, and a list of these key SKUs (stock-keeping units) is available on our website.”

The company, like most other FMCG majors, had also communicated the price and grammage changes through advertisements in multiple languages, the spokesperson added.