DRI conducts searches at Whirlpool of India units in Gurugram, Puducherry

Home appliance maker Whirlpool of India Limited said that the Directorate of Revenue Intelligence conducted searches at its units situated in Gurugram and Puducherry, in connection with a potential misclassification of the HSN Code of one of the components of a particular type of washing machine.

The company, in a regulatory filing on Wednesday, said that the searches were conducted as per Section 105 of the Customs Act, 1962. 

"We have limited information at this time but our preliminary understanding is that the issue is of limited financial materiality," the company said in its regulatory filing.

It is to be noted that the Centre imposes a GST of 18 per cent on household or laundry-type washing machines, including machines that both wash and dry. Before this, it was in the 28 per cent bracket.  

Whirlpool of India is a subsidiary of US-based Whirlpool Corporation and its portfolio here ranges from washing machines and refrigerators to air conditioners and kitchen appliances. The company owns three manufacturing facilities at Faridabad, Puducherry and Pune.

HSN stands for Harmonised System of Nomenclature (HSN) code, which is a six-digit identification code that helps in the systematic classification of goods across the globe. Of the six digits, the first two denote the HS Chapter, the next two give the HS heading, and the last two give the HS subheading.

At 2 PM, shares of Whirlpool of India were trading at Rs 1,452.70, down by 0.42 per cent. 

In Q4 FY23, Whirlpool of India reported a 24.5 per cent drop in its consolidated net profit owing to muted growth in the entry-level market, particularly in refrigerators and air conditioners. 

 The company reported revenue from operations of Rs 1672.65 crore, down by 2 per cent YoY, from Rs 1,706.91 crore in the year-ago quarter. 

During the quarter ended March 2023, the company’s total expenses stood at Rs  1,624.89 crore as against Rs 1,607.47 in the same quarter of FY22. Its EPS stood at Rs 4.94 during Q4FY23, compared to Rs 6.61 in the year-ago quarter.