HUL Offers To Set Aside Rs 119 Crore For Consumer Safeguard Fund
After profiteering notice, HUL offers to pay up.
Hindustan Unilever Ltd. had already offered to set aside Rs 119 crore towards the consumer safeguard fund, the FMCG major said after it received a notice from the anti-profiteering body for not passing on the benefits of lower GST rates to the consumer.
The maker of Wheel detergent said it has proactively disclosed an estimated value of Rs 119 crore to the Central Board of Excise and Customs and offered to pay this amount suo motu to the government. “This amount is not recognised as revenue and is accounted as a liability as on 31st December 17," the company said in a press release accompanying its earnings statement.
The Goods and Services Tax Council in its Nov. 10 meeting had reduced the rates on these categories of products to 18 percent from 28 percent earlier. The lower rates came into effect from Nov. 15.
HUL failed to lower prices for certain categories of products such as detergents and dishwashing soaps, as reported in an earlier BloombergQuint story. Yesterday, the anti-profiteering body under GST, the Directorate General of Safeguards issued a profiteering notice to the company.
“Due to paucity of time, it was not possible to immediately pass on the benefit of the 15th November GST rate reductions on some of the pipeline stocks to the end consumers,” HUL said in its press statement, explaining why it failed to cut prices.
When queried about the notice, HUL had told BloombergQuint in an emailed statement that it remains committed towards ensuring that all benefits arising from reduction in GST rates are fully passed on the consumers.
(Corrects an earlier version which said the company has offered to set aside the amount after the notice)