HUL found guilty of Profiteering Rs 383 crore

National Anti-profiteering Authority (NAA) assessment has revealed consumer goods maker Hindustan Unilever Ltd (HUL) allegedly profiteering to the extent of Rs 383 crore after the large-scale goods and services tax (GST) rate cut last November.

The National Anti-profiteering Authority (NAA) has asked HUL to deposit Rs 223 crore in central and state consumer welfare funds since the company itself had proactively deposited Rs 160 crore with the central consumer welfare fund.

National Anti-profiteering Authority

National Anti-profiteering Authority was constituted by the central government to provide an institutional mechanism under the GST law for checking the unfair profit-making activities by the trading community.

National Anti-profiteering Authority is headed by a senior officer of the level of Secretary to the Government of India. There will be four Technical Members from the Centre and/or the States.

GST consumer welfare funds

The GST law also provides for the creation of a Consumer Welfare Fund wherein undue benefits made by businesses under the GST law have to be deposited, in case it cannot be passed on to the identified recipient. The proceeds from the GST consumer welfare fund can be given as grant to the Centre and state governments as well as regulatory authorities.

Why the profiteering is rampant in India?

According to the anti-profiteering laws in India, businesses have to pass on the benefit of tax cuts as well as tax rebates to consumers. But the businesses often increase prices to commensurate with the reduced taxes due to the free nature of the market.

Also, there are no explicit guidelines for companies which they are required to follow so that the benefit of tax rebates and rate reductions on raw materials are passed on to consumers at the right measure across all final products. As a result, the NAA is witnessing a large number of complaints related to overcharging.

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