After HUL, Tax Department Opens Investigations Against Samsung, J&J For Profiteering From GST Rate Cuts

Samsung engineering office Bangalore. (Wikimedia Commons)

Government officials have claimed that quite a few big multi-national companies (MNCs) have profiteered from GST rate cuts and did not pass on the benefits to consumers, reports Reuters.

According to a senior government official, the tax department has opened investigations against South Korean tech major Samsung Electronics and US pharma giant Johnson & Johnson (J&J) among others.

These firms are alleged to have benefited disproportionately from GST rate cuts by refusing to cut product prices in line with the new tax rates. Thus, though the consumers continued to pay the same prices as in the pre-GST era, the companies made bigger profits since their tax liability had come down.

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Earlier in the week, FMCG giant P&G India was found guilty of profiteering from a GST rate cut and not passing on benefits worth Rs 250 crore back to consumers.

Samsung, P&G and Johnson & Johnson have denied the allegations and said they are in compliance with the rules.

FMCG Giants Under Scanner

In December 2018, NAA had also charged another FMCG company Hindustan Unilever Limited (HUL) for not passing on GST rate cut benefits of Rs 383 crore to its customers.

National Anti-profiteering Authority (NAA) is India’s apex agency that works “ensure that the benefits of the reduction is GST rates on goods and services made by GST Council and proportional change in the Input tax credit is passed on to the ultimate consumers.”

Also Read: 18 Months In, Here’s How GST Has Fared On The Ground

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