Hindustan Unilever rose 1.02% to Rs 1,809.40 at 10:23 IST on BSE after the company said it is considering legal options after GST authority found it guilty of not passing on rate cut benefits to consumers.
The announcement was made after market hours yesterday, 26 December 2018.Meanwhile, the S&P BSE Sensex was up 248.33 points, or 0.7% to 35,898.27
On the BSE, 14,000 shares were traded in the counter so far compared with average daily volumes of 3.17 shares in the past two weeks. The stock had hit a high of Rs 1,811.90 and a low of Rs 1,801.20 so far during the day.
In clarification to media report indicating GST authority has found Hindustan Unilever (HUL) guilty of profiteering Rs 383 crore, HUL clarified that the National Anti Profiteering Authority (NAA) has passed an order against the company on 24 December 2018 for depositing an amount of Rs 223 crore.
Hindustan Unilever has always maintained that the GST is a progressive reform which will benefit consumers and the industry at large. In the absence of set rules and guidelines on profiteering, HUL has gone by the spirit of the law, and passed on the entire benefit received under GST to consumers - either through reduction in prices or through increase in grammage. In addition, HUL had taken many steps as a matter of good governance and by keeping consumers interest in mind. HUL kept the Government informed of the approach and the manner that it had adopted in passing on the GST benefits to consumers.
The NAA order refers to the need to pass on the benefit of reduction in rates to consumers which is fully consistent with HUL's stand and actions. However, it makes a narrow interpretation of the law and does not take into account well established industry practice backed by law. Also, no methodology has been determined by NAA as required under law to determine if benefit has been passed or not. Given there is divergence on some basic issues, HUL will, consider legal options available to it. There is no material impact of the demand and as well as this article on the company, HUL said.
HUL is India's largest fast moving consumer goods company.
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