Hindustan Unilever Ltd (HUL), a prominent FMCG maker, faces GST demands and penalties of Rs 447.5 crore from authorities in five states. The orders, received on December 30 and 31, 2023, involve issues like disallowance of GST credit and taxation on expat salaries.
In a late-night regulatory filing on Monday, HUL, the owner of brands such as Lux, Lifebuoy, Surf Excel, Rin, Pond’s, and Dove, stated that these orders are currently appealable, and the company will assess its options.
HUL Faces GST Challenges
Last week, GST officials from different zones passed a total of five orders for the company, addressing issues such as disallowance of GST credit and salaries, including allowances paid to expats, on Friday and Saturday. The company received these orders on December 30 and 31, 2023.
HUL received the orders on December 30 and 31, 2023. The company is submitting the intimation today, January 1, 2024, which is the first working day following the receipt of the orders.
The Joint Commissioner, CGST, and Central Excise, Mumbai East, has demanded tax on salaries, including allowances paid to expats, totalling Rs 372.82 crore, along with a penalty of Rs 39.90 crore. Additionally, the Deputy Commissioner of Commercial Tax Officer, Bengaluru, has issued a tax demand of Rs 8.90 crore, citing excess GST credit availed, coupled with a penalty amounting to 89.08 lakh.
The Excise and Taxation Officer in Sonipat, Rohtak, Haryana, issued a demand order disallowing GST credit of Rs 12.94 crore and imposing a penalty of Rs 1.29 crore. Simultaneously, the Additional Commissioner in Kochi Commissionerate disallowed GST credit and turnover adjustment of Rs 8.65 crore, imposing a penalty of Rs 87.50 lakh.
HUL states that these demands and penalties will have no material impact on financials. The company emphasizes that these orders are currently appealable, and an assessment will be made to exercise their right to appeal. In the financial year ending on March 31, 2023, HUL reported revenue of Rs 59,144 crore.
