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

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

An Appeal...

Dear Reader,

As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.

Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.

We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.

Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.

Become A Patron
Become A Subscriber
Advertisement