P&G guilty of profiteering Rs 250 crore from GST rate cut

New Delhi: An anti-profiteering investigation has discovered that leading FMCG firm P&G India is guilty of not passing on GST rate cut benefits to the tune of about Rs 250 crore to the consumers.

Based on a complaint filed before the standing committee, the Directorate General of Anti profiteering (DGAP) investigated the books of accounts of P&G India pre and post November 15, 2017, and concluded that the consumer goods manufacturer has not lowered prices of certain products despite a reduction in the goods and services tax rate to 18 per cent from 28 per cent.

"The DGAP report has concluded profiteering worth Rs 250 crore by P&G. The National Anti Profiteering Authority will pass a final order on the quantum of profiteering after hearing the company's views," an official said.

After studying the documents, the DGAP gives its report to the National Anti-Profiteering Authority (NAA) for further action. If the NAA finds a firm guilty of profiteering then the amount profiteered has to be refunded to consumers by the company. In case where the consumers cannot be identified, the amount has to be deposited into the consumer welfare fund of the Centre and states.
In December 2018, the NAA had found another FMCG firm HUL guilty of profiteering of Rs 535 crore by not passing on tax rate cut benefits to consumers on its range of products.

P&G's India is the manufacturer of washing powder brands Ariel and Tide; shampoo brands Heads & Shoulders and Pantene; cosmetics brand Olay, and shaving and dental hygiene brands Gillette and Oral-B. It also manufactures products under the brand name Ambi Pur, Pampers, Vicks and sanitary napkin Whisper.

When contacted, a P&G spokesperson said that P&G has always been committed to passing the net benefit of GST rate reduction to the consumers. "We have passed the net benefit and communicated the same via advertising in mass media to help increase awareness with the consumers, shoppers and retailers," the spokesperson said.