Sachets of Hindustan Unilever Ltd. Sunsilk shampoo, from left, and Dove shampoo are displayed for sale at a store. (Photographer: Kuni Takahashi/Bloomberg)

Delhi High Court Stays Rs 462-Crore Penalty Demand On Hindustan Unilever

The Delhi High Court has stayed the demand of Rs 462 crore made on Hindustan Unilever Ltd. by the National Anti-Profiteering Authority, which claimed that the consumer goods major failed to pass on the benefits of lower goods and service tax rate.

The court directed the authority that no coercive action be taken, and no penalty proceedings be continued against HUL until it makes a final determination on the matter.

Since the matter involves issues requiring detailed examination of contentions of both the parties, the court asked HUL to deposit Rs 90 crore in two installments (Rs 50 crore by March 15 and Rs 40 crore by May 15) to the Consumer Welfare Fund by May 15.

The authority ruled in December that HUL profiteered Rs 419.67 crore due to sales realisation following an increase in base prices after a GST rate cut in two slabs—from 28 percent to 18 percent and 18 percent to 12 percent.

HUL was also accused of availing transition credit of Rs 76.06 crore, which wasn’t passed to consumers by reducing prices. The company’s redistribution stockists wrongly availed input tax credit of Rs 36.19 crore at 28 percent GST, when it was cut, on several items, to 18 percent.

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