Leading FMCG maker Hindustan Unilever Ltd (HUL) has recently disclosed that it has been served with Goods and Services Tax (GST) demands and penalties amounting to Rs 447.5 crore by the authorities. The company, known for its popular brands such as Lux, Lifebuoy, Surf Excel, Rin, Pond’s, and Dove, stated that these orders are currently subject to appeal, and it is in the process of evaluating its options.

The demands and penalties stem from a total of five orders issued by GST officials from different zones. The issues addressed in these orders include the disallowance of GST credit and the treatment of salaries, including allowances paid to expatriates. HUL received these orders on December 30th and 31st, 2023, and has promptly notified the regulatory authorities on January 1st, 2024.

The specific details of the demands include a tax demand of Rs 372.82 crore and a penalty of Rs 39.90 crore related to salaries, including allowances paid to expatriates, as per the Joint Commissioner, CGST and Central Excise, Mumbai East. Additionally, the Deputy Commissioner of Commercial Tax Officer, Bengaluru, has issued a demand of tax amounting to Rs 8.90 crore and a penalty of Rs 89.08 lakh for the alleged excess GST credit availed. Moreover, the Excise and Taxation Officer, Sonipat, Rohtak, Haryana, has disallowed GST credit amounting to Rs 12.94 crore and imposed a penalty of Rs 1.29 crore. The Additional Commissioner, Central Tax and Central Excise, Kochi Commissionerate, has also disallowed GST credit and turnover adjustment amounting to Rs 8.65 crore and imposed a penalty of Rs 87.50 lakh.

Despite these developments, HUL has emphasized that these demands and penalties will not have any material impact on its financial or operational activities, given the intimation of tax payable. The company has reaffirmed its commitment to comply with the applicable laws and regulations and stated that it will assess its right to appeal against these orders.

In the financial year ending on March 31, 2023, HUL reported a revenue of Rs 59,144 crore, indicating its strong position in the FMCG sector.

Leading FMCG maker Hindustan Unilever Ltd (HUL) has recently disclosed that it has been served with Goods and Services Tax (GST) demands and penalties amounting to Rs 447.5 crore by the authorities. The company, known for its popular brands such as Lux, Lifebuoy, Surf Excel, Rin, Pond’s, and Dove, stated that these orders are currently subject to appeal, and it is in the process of evaluating its options.

The demands and penalties stem from a total of five orders issued by GST officials from different zones. The issues addressed in these orders include the disallowance of GST credit and the treatment of salaries, including allowances paid to expatriates. HUL received these orders on December 30th and 31st, 2023, and has promptly notified the regulatory authorities on January 1st, 2024.

The specific details of the demands include a tax demand of Rs 372.82 crore and a penalty of Rs 39.90 crore related to salaries, including allowances paid to expatriates, as per the Joint Commissioner, CGST and Central Excise, Mumbai East. Additionally, the Deputy Commissioner of Commercial Tax Officer, Bengaluru, has issued a demand of tax amounting to Rs 8.90 crore and a penalty of Rs 89.08 lakh for the alleged excess GST credit availed. Moreover, the Excise and Taxation Officer, Sonipat, Rohtak, Haryana, has disallowed GST credit amounting to Rs 12.94 crore and imposed a penalty of Rs 1.29 crore. The Additional Commissioner, Central Tax and Central Excise, Kochi Commissionerate, has also disallowed GST credit and turnover adjustment amounting to Rs 8.65 crore and imposed a penalty of Rs 87.50 lakh.

Despite these developments, HUL has emphasized that these demands and penalties will not have any material impact on its financial or operational activities, given the intimation of tax payable. The company has reaffirmed its commitment to comply with the applicable laws and regulations and stated that it will assess its right to appeal against these orders.

In the financial year ending on March 31, 2023, HUL reported a revenue of Rs 59,144 crore, indicating its strong position in the FMCG sector.