Hindustan Unilever, the FMCG manufacturer has announced that it has received Goods and Services Tax (GST) demands and penalties totalling Rs 447.5 crore from the authorities.
The company has received a total of five orders passed from different zones of GST officials over issues such as disallowance of GST credit, salaries including allowances paid to expats, etc.
However, HUL, which owns brands such as Lux, Lifebuoy, Surf Excel, Rin, Pond’s, and Dove, has stated that these “orders are currently appealable” and that it will assess them. The company received these orders on 30 and 31 December 2023, respectively, and it is submitting the intimation on 1 January 2024, as it is the first working day after receiving the orders.
The orders include a demand for tax “on salaries including allowances paid to expats amounting to Rs 372.82 crore and penalty amounting to Rs 39.90 crore” from the Joint Commissioner, CGST and Central Excise, Mumbai East.
Additionally, a Deputy Commissioner of Commercial Tax Officer, Bengaluru, has issued a demand of tax “on the grounds of excess GST credit availed amounting to Rs 8.90 crore and penalty amounting to 89.08 lakh”. An Excise and Taxation Officer, Sonipat, Rohtak, Haryana, has issued a demand order “wherein GST credit amounting to Rs 12.94 crore has been disallowed and a penalty amounting to Rs 1.29 crore has been imposed”.
Furthermore, an Additional Commissioner, Central Tax and Central Excise, Kochi Commissionerate, has disallowed GST credit and turnover adjustment amounting to Rs 8.65 crore and imposed a penalty amounting to Rs 87.50 lakh.
According to HUL, these GST demands and penalties will have “no material impact on financial, no impact on operation” or other activities of the company due to the intimation of tax payable. The company has stated that it will exercise its right to appeal, as the orders are currently appealable. For the financial year that ended on 31 March 2023, HUL’s revenue was Rs 59,144 crore.
