Patnajali’s distributors under authorities scanner for not passing GST rate cut benefits

Patanjali Products
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Patanjali Ayurved distributors have come under the scanner of National Anti-Profiteering Authority (NAA) for not passing on the GST rate cuts to its customers, cited some media reports.

As per the reports, NAA earlier this month issued notices to around 10 of Patanjali‘s biggest distributors in the issue regarding this and NAA in the notice has asked them to give all relevant details of prices charged on products, particularly cosmetics.

After the roll-out of GST on July 1 2017, the GST council has met several and introduced many rate cuts for many products.

Last year in October, NAA slapped Baba Ramdev led Patanjali with about Rs 150 Crore for not passing on the GST rate cut benefits to the consumers. Patanjali on the other side is seeking legal recourse against this action of NAA.

Patanjali is not the sole company which is currently under scanner of NAA for not giving rate cut benefits. These include  Hindustan Unilever (HUL), Procter & Gamble (P&G), Johnson & Johnson (J&J) and Hardcastle Restaurants, a franchisee of fast food chain McDonald’s.

According to the Tax experts the genesis of the problem is lack of a proper mechanism to determine whether the benefits are passed or not. “As of now, there is no methodology that the government or NAA has prescribed to arrive at anti-profiteering and so several companies are facing a challenge,” Abhishek A Rastogi, Partner, Khaitan & Co.

Considering there were many tweaks in GST, it would have created a lot of complications for distributors to not just calculate but also pass on the benefits, Rastogi added.

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