A man takes a bar of Hindustan Unilever Ltd. Lux soap off a shelf at a store (Photographer: Kuni Takahashi/Bloomberg)

HUL Considering Legal Options Against GST Anti-Profiteering Authority Order

Hindustan Unilever Ltd. on Wednesday said it was considering "legal options" after the Goods and Service Tax anti-profiteering authority found it guilty of not passing on rate cut benefits to consumers.

The National Anti Profiteering Authority passed an order against the company on Dec. 24 for depositing Rs 223 crore, HUL said in a regulatory filing.

Making its stand clear on the matter, the company said that the order refers to the need to pass on the benefit of reduction in rates to consumers and this was fully consistent with the company’s “stand and actions”. "However, it makes a narrow interpretation of the law and does not take into account well established industry practice backed by law."

It also said that, "no methodology has been determined by NAA as required under law to determine if benefit has been passed or not”. “Given there is divergence on some basic issues, HUL will consider legal options available to it."

Also read: GST Anti-Profiteering Body Rules HUL Made Unjust Profit Of Rs 535 Crore

The company claimed that it has always maintained that the GST is a progressive reform which will benefit consumers and the industry at large.

"In the absence of set rules and guidelines on profiteering, HUL has gone by the spirit of the law, and passed on the entire benefit received under GST to consumers—either through reduction in prices or through increase in grammage," it said in the filing.

HUL said it kept the government informed of the approach and the manner that it had adopted in passing on the GST benefits to consumers.

The NAA had stated that although the GST rate on a large number of products was cut from 28 percent to 18 percent, HUL had not reduced the maximum retail price of its products.

Also read: GST Council: Full List Of Rate Cuts 

The authority had found the company guilty of not passing on rate cut benefits of Rs 383 crore to consumers.

"Since the respondent (HUL) has already deposited an amount of Rs 160.23 crore in the Central CWF (consumer welfare fund), he is hereby directed to deposit an amount of Rs 31.45 crore in the central CWF and the balance amount of Rs 191.68 crore in CWFs of the states," the NAA had said.