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Hindustan Unilever told to pay Rs 383 crore for not passing lower GST benefit to customers

As per GST rules, 50 per cent of the amount profiteered or Rs 191.68 crore is required to be deposited by the company in the central consumer welfare fund, while the balance amount is to be deposited in the CWF of concerned states where the company sold its products.

twitter-logo PTI   New Delhi     Last Updated: December 25, 2018  | 08:18 IST
Hindustan Unilever told to pay Rs 383 crore for not passing lower GST benefit to customers

The GST anti-profiteering authority has found HUL guilty of not passing on rate cut benefits of Rs 383 crore to consumers. The complaint before the National Anti-Profiteering Authority (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, HUL had not reduced the maximum retail price (MRP) of its products.

The NAA while passing the order said that Rs 383.35 crore worth "benefit has been denied" by HUL to his customers. As per GST rules, 50 per cent of the amount profiteered or Rs 191.68 crore 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 160.23 crore in the Central CWF, he is hereby directed to deposit an amount of Rs 31.45 crore in the central CWF and the balance amount of Rs 191.68 crore 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.

Also read: Hindustan Unilever, Tata Chemicals, ITC under fire for misleading advertisements

"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 delilberately 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.

Also read: Hindustan Unilever net profit grows over 27 per cent at Rs 1,326 crore during December quarter

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