You are here: Home » Companies » News
Business Standard

GST authority says HUL didn't pass on Rs 3.83-bn rate cut benefit to buyers

The authority also directed HUL to reduce the prices of its products by way of commensurate reduction keeping in view the reduced rates of tax and the benefit of ITC

Press Trust of India  |  New Delhi 

GST

The GST anti-profiteering authority has found guilty of not passing on rate cut benefits of Rs 3.83 billion to consumers.

The complaint before the (NAA) stated that although the Goods and Services Tax (GST) rate on a large number of products was cut from 28 per cent to 18 per cent, had not reduced the maximum retail price (MRP) of its products.

The NAA while passing the order said that Rs 3.8335 billion worth "benefit has been denied" by to his customers.

A statement from the company is awaited.    

As per GST rules, 50 per cent of the amount profiteered or Rs 1.9168 billion is required to be deposited by the company in the central consumer welfare fund (CWF), while the balance amount is to be deposited in the CWF of concerned states where the company sold its products.  

"Since the respondent (HUL) has already deposited an amount of Rs 1.60229 billion in the Central CWF, he is hereby directed to deposit an amount of Rs 314.5 million in the central CWF and the balance amount of Rs 1.9168 billion in CWFs of the states," the NAA said.

The authority also directed HUL to reduce the prices of its products by way of commensurate reduction keeping in view the reduced rates of tax and the benefit of ITC. 

"He (HUL) has acted in conscious disregard of the obligation which was cast upon him to pass on the benefit of GST rate reductions. Instead, he had deliberately increased the base prices by enhancing them equivalent to the amount of GST rate reductions in order to keep the old MRPs in place or not reduced them proportionately to the benefit of tax reductions...," the NAA said in the order.

The present investigation was conducted by the Directorate General of Anti-Profiteering between November 15, 2017, and February 28, 2018.

The NAA directed DGAP to conduct further investigation to ascertain whether the respondent has passed on the benefit of tax reductions in respect of all the products being sold by him and submit a report quantifying the amount of profiteering. 

First Published: Mon, December 24 2018. 21:05 IST
RECOMMENDED FOR YOU