Business

Anti-profiteering body may pass final order on profiteering complaint against HUL

Updated : November 27, 2018 01:16 PM IST

In what could be the biggest case of profiteering so far, the National Anti-Profiteering Authority (NAA) is soon likely to issue final orders in the case of alleged profiteering by fast moving consumer goods (FMCG) major, Hindustan Unilever (HUL).

Not just this, NAA is also likely to dispose of the case of Jubilant FoodWorks, sources told CNBCTV18.

In September, the Directorate General of Anti-Profiteering (DG-AP) had alleged that HUL has profiteered Rs 495 crore by not passing on the benefits of reduced Goods and Services Tax India (GST) rates.

That’s more than three times the Rs 160 crore India’s largest consumer goods maker voluntarily deposited in a consumer welfare fund as the profiteered amount.

Meanwhile, sources further added that the NAA is also in final stages of examination of the case of profiteering against FMCG company, Nestle.

DG-AP, the government watchdog body, which was investigating the charges of profiteering against Nestle, recently submitted its final report to NAA asserting profiteering charges worth about Rs 100 crore against the global food and beverage company.

Sources also added that currently NAA is also examining other case on fast track basis including complaints against — Panasonic, Somany Tiles, Asian Paints, Kajaria Tiles, Saint Gobain, Mahindra Lifespaces etc.”

On being asked, NAA confirmed that the above mentioned cases are under investigations at various levels.

NAA So Far…

Anti-profiteering measures provide an institutional framework to ensure that the full benefits of input tax credits and reduced GST rates on goods or services flow to consumers.

This institutional framework comprises the NAA, a standing committee, a screening committee in every state and the DG-AP under the Central Board of Indirect Taxes and Customs (CBIC).

Once NAA confirms a necessity to apply anti-profiteering measures, it steps in by investigating the charges level by DG -AP and asks businesses that have not passed on the full benefits of a reduced tax burden to consumers to refund it with interest.

If the undue benefit derived by a business cannot be returned to the recipient, it can be ordered to be deposited in the Consumer Welfare Fund. In rare cases, a profiteering business could lose its GST registration too.

It has been almost a year since its inception and NAA is examining 52 cases of profiteering. Of these 52 cases, NAA has issued final orders in 14 cases. Of the 14 complaint which have been disposed of till date, NAA has fined just five companies for not passing on the benefits of GST rate cuts or input tax credit to the consumers.

In the case of Pyramid Infratech, the company has challenged NAA's order in Delhi High Court and the case was admitted in November 2018 by the court.

The petition challenges constitutional validity of the anti-profiteering mechanism. NAA had found Pyramid Infratech guilty of profiteering and issued the order last month.

Anti-profiteering body may pass final order on profiteering complaint against HUL

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