Six months after the National Anti-profiteering Authority (NAA) was set up, companies like Hindustan Unilever and Nestle India are not clear how to transfer ‘profiteering’ amounts that arose after goods and services tax rates were changed in November.
Hindustan Unilever is awaiting bank account details from the NAA to be able to deposit Rs 1.6 billion. Nestle India has been advised by the NAA to deposit the amount it has calculated in the Consumer Welfare Fund. The fund is yet to be constituted.
HUL said it was not possible to immediately pass on the benefit of the GST rate reductions on some of its pipeline stocks to end-consumers. The company calculated a profiteering amount of Rs 1.24 billion and offered it to the government.
“We await bank account details so we can deposit the cheques at the earliest,” HUL said in response to a query.
“Further, on behalf of our redistribution stockists, we have offered Rs 360 million towards additional realisation, which would have been made by them on their closing stock at the point of transition,” the company added. This takes the total amount to Rs 1.6 billion.The company had received a notice from the Director General Safeguards to determine the profiteering amount.
Nestle said it was in the process of calculating the final amount of the benefit that could not be passed on to consumers.
“The authority has advised us to provisionally deposit the amount computed by us in the Consumer Welfare Fund to be constituted under the CGST and furnish the necessary documents,” the company’s spokesperson said.
A senior official in the Central Board of Indirect Taxes and Customs (CBIC) said there was no mechanism at the moment for companies to voluntarily deposit profiteering amounts and an order needed to be issued by the NAA after investigation by DG Safeguards for a case to be closed. “We cannot simply go by companies’ calculations. DG Safeguards needs to carry out an investigation,” the official added.
The NAA has so far issued two orders, and both have gone in favour of companies. It has dismissed charges against Basmati exporting firm KRBL and Vrandavaneshwaree Automotive, a Bareilly-based dealer for Honda cars.
Read More at : http://www.business-standard.com/article/companies/hindustan-unilever-nestle-not-sure-how-to-pay-profiteering-sums-118053100074_1.html