One of India’s leading FMCG firm, Hindustan Unilever, has been fined whopping Rs 535 crore in a Goods and Services Tax (GST) profiteering case, CNBC-TV18 reported. The National Anti-Profiteering Authority (NAA) has been probing HUL among other firms for allegedly not passing the GST rate cut benefit to consumers.
According to the news channel, the NAA report concluded that HUL profiteered Rs 495 crore by not passing the benefit of the rate cut to consumers. The company said that it is yet to receive NAA order but maintained that it has passed the rate cut benefit either through discounts, price cuts or through the increase in grammage, the channel reported.
The company also said that it has deposited sou moto Rs 160 crore to government’s Consumer Welfare Fund. Earlier, Directorate General of Anti-Profiteering (DGAP) had found Nestle profiteering Rs 100 crore by not passing GST cut benefits.
The NAA was formed in November 2017 under the GST Act following a massive tax cut on about 200 items to probe if companies were passing the benefit to consumers or not. Of the 178 items, on which the GST rates were lowered, a majority of them were Fast Moving Consumer Goods (FMCG).
This month only, in two identical cases, NAA held two Johnson & Johnson products dealer and Cadbury and Nestle products guilty of profiteering by increasing the base price of the product after the rate cut so that the MRP remained the same instead of passing on the benefit to consumers.