“Effective November 15, GST rates were reduced for some of our categories from 28% to 18%. While the implementation of this change was initiated immediately, it was not possible to pass on the entire benefit of this rate reduction on some of the pipeline stocks during the transition and consequently an estimated differential amount of Rs. 119 crores were collected,” HULBSE -1.07 % said in a statement in response to a report by ET Now that the amount was a fine under an anti-profiteering notice.
This, HUL said, was proactively disclosed to the CBEC in December first week and January first week. “The firm had voluntarily offered to pay this amount suo motu to the government,” the firm said. “We are awaiting advice from them so that we can deposit the cheques at the earliest. We have not recognized this amount as a revenue and holding it as a liability in our books.”
Last month, Hindustan Unilever had received a notice from the Directorate General of Safeguards (DGS), which had been checking to make sure companies were passing on the benefits of lower levies under the GST regime to consumers.
DGS, the investigation arm of the revenue department, also sent notices under GST anti-profiteering rules to Hardcastle Restaurants, which runs McDonald’s restaurants in west and south India, Lifestyle International, Honda Motor and an HUL dealer in Jaipur in the past few weeks.
Price-reduction efforts gained pace in November last year when the GST Council dropped tax rates on 200 products including chocolates, toothpaste, shampoo, washing powder and shaving creams, to 18% from 28% to ease the burden on consumers. The government wanted to ensure that this intent was translated into action.
From releasing ads informing consumers about revised prices to deploying software to closely monitor billing and invoicing at retail stores, most companies ensured that products reflected the reduced GST rates on shop shelves.
Source: Economic Times
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