GST anti-profiteering body investigates Baba Ramdev's Patanjali Ayurved, FMCG major ITC

The Directorate General of Anti-Profiteering (DGAP) has reportedly widened its probe against FMCG and consumer durable firms for not passing on the net benefit of GST rate reduction to the consumers, a media report said. According to Business Standard, the DGAP is investigating FMCG major ITC and Baba Ramdev’s Patanjali Ayurved among others. The DGAP indicated that Patanjali Ayurved profiteered around Rs 176 crore on various FMCG items till August 2018, the report said. “We are now extending our investigation to check further profiteering by Patanjali till March 2019,” a government official was quoted as saying by Business Standard. Last week, tax authorities alleged that a number of multinational companies did not pass on benefits from a tax cut to customers. The tax authorities alleged that US consumer goods maker Procter & Gamble did not pass on more than $35 million in tax benefits which were meant to have gone to its customers. [caption id=“attachment_4179443” align=“alignleft” width=“380”] Representational image. Reuters.[/caption] Separately, the authorities are also investigating South Korea’s Samsung Electronics and US drugmaker Johnson & Johnson among others, the senior government official, speaking on condition of anonymity, said. National Anti-Profiteering Authority - a quasi-judicial body set up following the rollout of the Goods and Services Tax in 2017, found P&G had not reduced prices on many products after a tax cut on those items, the official said. In a statement, P&G said: “As a responsible corporate, P&G has always been committed to passing the net benefit of GST rate reduction to the consumers.” P&G said it had passed on the rollbacks and communicated this via advertising in mass media. Samsung also said it had acted in accordance with the rules. “Samsung reduced its sales price according to GST (Goods and Services Tax) reduction with effect from January 1, 2019. We are cooperating with DGAP (Directorate General of Anti Profiteering) on this matter,” the company said in a statement. A J&J spokeswoman said via email that the company had passed on all benefits to customers, after the government exempted sanitary napkins from the goods and services tax. “The matter is currently under adjudication and we continue to work closely with the authorities to address any queries that they may have on the subject,” the spokeswoman said. With inputs from Reuters