Government Asks HUL To Explain Math Behind Rs 119 Crore Profiteered Sum
India’s Anti-Profiteering Body Wants To Know How HUL Arrived At These Profits
- Government seeks additional data from Hindustan Unilever on profiteered amount.
- Directorate General of Safeguards wants details on HUL’s Rs 119 crore calculation.
- January numbers too may reflect a profiteered amount, HUL tells BloombergQuint.
The Directorate General of Safeguards has asked Hindustan Unilever Ltd. to explain how it arrived at Rs 119 crore as the profiteered amount for the months of November and December 2017, a senior government official told BloombergQuint on condition of anonymity. The company has been asked to submit documents that led HUL to calculate a Rs 60 crore figure for November, and Rs 59 crore for December, the official added.
The Directorate General of Safeguards is the division of the Central Board Of Excise And Customs that serves as the investigating agency supporting the National Anti-profiteering Authority, set up under the Goods and Services Tax regime. HUL, the maker of Lux and Pears soaps, confirmed that Directorate General of Safeguards has asked for an explanation and clarification on the same, which and said it in the process of furnishing the information.
DG Safeguards has sought some further clarifications on methodology and requested some supporting documents pertaining to the earlier issue in response to earlier communication with us.Hindustan Unilever Statement To BloombergQuint
During its earnings release for the October-December 2017 quarter, HUL disclosed that it had set aside liabilities of Rs 119 crore, and offered suo moto to deposit the amount into the Consumer Safeguard Fund.
On Nov. 10, 2017, the GST Council revised the rates levied on a number of goods and services. In its earnings commentary, HUL said it was able to reflect the price changes on its items only after the existing stock in the market had cleared.
It was not possible to immediately pass on the benefits of the November rate reduction, on some of our pipeline stocks, to consumers.Srinivas Pathak, CFO, Hindustan Unilever, On January 18, 2018
In its response to BloombergQuint, HUL adds that such a liability would also arise for the month of January 2018. “This [the exercise to compute profit earned due to GST] is in progress and will be shared in due course of time, the company said.
(With inputs from Sharleen Dsouza)