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ITC, Patanjali under lens for not passing on GST rate cuts to consumers

The government cut GST rates to 18% from 28% in November 2017 for 178 products including detergents, shampoos and beauty products.

twitter-logo BusinessToday.In        Last Updated: April 29, 2019  | 19:16 IST
ITC, Patanjali under lens for not passing on GST rate cuts to consumers

FMCG firm ITC and Baba Ramdev's Patanjali Ayurveda have come under the scanner of profiteering watchdog for not passing benefits of reduced goods and services tax (GST) rates to consumers. ITC received notice from Directorate General of Anti Profiteering (DGAP) for withholding benefits of GST rate reduction on its FMCG products, the Business Standard reported.

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The government cut GST rates to 18% from 28% in November 2017 for 178 products including detergents, shampoos and beauty products. ITC confirmed to Business Standard that it had received enquiries from the DGAP and it was providing necessary information to the authorities.

According to the report, DGAP has indicated Patanjali Ayurveda earned nearly Rs 176-crore profit on various FMCG products till August 2018.  The probe into profiteering by Baba Ramdev-led Patanjali is being extended till March 2019, the report said.

Multinational companies such as Procter & Gamble (P&G), Johnson & Johnson (J&J), and Samsung have also been accused of not passing on the benefits of GST rate cuts to consumers.

The tax authorities had alleged that the US consumer goods maker Procter & Gamble did not pass on Rs 250 crore in tax benefits which were meant to have gone to its customers. In July 2018, the GST Council had exempted sanitary napkins from the levy which stood at 12%.  P&G sells the Whisper brand of sanitary napkins.

J&J, which sells Stayfree brand of sanitary napkins, too has come under the scanner of profiteering watchdog.

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A J&J spokeswoman said via email that the company had passed on all benefits to customers after the government exempted sanitary napkins from the goods and services tax. "The matter is currently under adjudication and we continue to work closely with the authorities to address any queries that they may have on the subject," the spokeswoman said.

Samsung is being probed for not passing rate cut benefits in case of television sets.

In its December meeting, the GST Council had reduced rates on monitors and TV sets of up to 32 inches from 28 percent to 18 percent. Meanwhile, a spokesperson for Samsung said the firm reduced its sales price according to GST reduction on January 1.

"Samsung reduced its sales price according to GST (Goods and Services Tax) reduction with effect from January 1, 2019. We are cooperating with DGAP (Directorate General of Anti Profiteering) on this matter," the company said in a statement.

The firm received a notice from the DGAP after a consumer filed a complaint with respect to pricing of the Samsung television.

 Edited By Aseem Thapliyal

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