GST Anti-Profiteering: Investigating Agency Says ITC Made Undue Profits
The Goods and Service Tax investigation body has found that ITC Ltd. allegedly made undue profits by not passing on the benefit of GST rate cut to consumers.
The Directorate General of Anti-Profiteering has accused the maker of Fiama Di Wills soap of not lowering the prices of its fast moving consumer goods, according to a person aware of the development. The investigation against the company is ongoing, he said.
The GST Council had reduced goods and services tax on a range of consumer goods from 28 percent to 18 percent in November 2017, and the GST probe body has been acting on complaints received by it against companies which had not lowered prices of their products.
Responding to BloombergQuint’s queries, ITC spokesperson said that the company has received enquiries from Directorate General of Anti-Profiteering in connection with passing on appropriate benefits of GST rate reduction to our customers. “We are continuously providing necessary information to the authorities. The matter is still pending,” the spokesperson said in an email. “We are in full compliance with the law and will continue to cooperate with the authorities on the matter.”
The amount of undue profits is yet to be ascertained.
This comes days after the GST investigation body found Procter & Gamble of profiteering to the tune of Rs 250 crore. Nestle India has also been charged for not giving the benefit of tax cut to consumers. The anti-profiteering body is planning to widen its probe to other consumer goods companies—Patanjali Ayurved Ltd. and Hindustan Unilever Ltd.
According to Section 171 of the Central Goods and Services Tax Act, any reduction in the tax rate on goods or services or the benefit of input tax credit shall be passed on to customers through commensurate reduction in prices.