The Directorate General of Safeguards (DGS) has sent a notice to Hindustan Unilever (HUL), Lifestyle International, Honda Motor and Hardcastle Restaurants for allegedly not passing on the price reduction benefit to consumers after the rollout of Goods and Services Tax (GST).
"The standing committee had referred the matter to the DGS which in turn has issued queries to HUL seeking response on whether the benefit of tax rate reduction post GST is passed on to consumers," a source close to the matter told NDTV.
This is the sixth notice under the anti-profiteering rule issued by the DGS, the investigative arm of the finance ministry, to companies for not reducing prices after the implementation of the new tax regime from July 1, 2017, the TV channel reported.
"We are in the process of ascertaining the full details. We will respond to the same stating our position. HUL remains fully committed towards ensuring that all benefits arising from reduction in GST rates are fully passed on to the consumers," PTI quoted HUL as saying.
"We have communicated to trade asking them to pass on the benefits to consumers," added HUL.
The notice from the DGS reportedly seeks details from HUL about the pre and post GST prices of its entire products range. These items include fast moving consumer goods (FMCG) such as shampoo, detergent and soaps.
Last November, the GST Council dropped tax rates on 200 FMCG products to 18 percent from 28 percent to reduce the price burden on consumers. To ensure that the benefits are also passed on to the end consumers immediately the government had also approved the creation of National Anti-profiteering Authority (NAA) under GST.
The DGS said that it will complete its investigation in the next 3-6 months and send the final report to the NAA. According to Economic Times, the NAA orders might include measures like directing the reduction in prices and refund of benefit availed to consumers.