Hindustan Unilever Ltd (HUL), a leading FMCG maker renowned for brands such as Lux, Lifebuoy, Surf Excel, Rin, Pond’s, and Dove, disclosed on Monday that it has received Goods and Services Tax (GST) demands and penalties totaling Rs 447.5 crore from the authorities.
The regulatory filing by HUL revealed that the company received a total of five orders from different zones of GST officials, addressing issues ranging from the disallowance of GST credit to salaries, including allowances paid to expatriates, over the course of Friday and Saturday last week.
Notably, the demand for tax on salaries, including allowances paid to expats, amounts to Rs 372.82 crore, accompanied by a penalty of Rs 39.90 crore, as indicated by the Joint Commissioner, CGST, and Central Excise, Mumbai East. Additionally, the Deputy Commissioner of Commercial Tax Officer, Bengaluru, issued a demand of tax on the grounds of excess GST credit availed, totaling Rs 8.90 crore, with a penalty of Rs 89.08 lakh.
The Excise and Taxation Officer in Sonipat, Rohtak, Haryana, imposed a demand order disallowing GST credit amounting to Rs 12.94 crore and imposing a penalty of Rs 1.29 crore. Furthermore, the Additional Commissioner, Central Tax and Central Excise, Kochi Commissionerate, disallowed GST credit and turnover adjustment amounting to Rs 8.65 crore and imposed a penalty of Rs 87.50 lakh.
HUL emphasized that these GST demands and penalties would 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 assured stakeholders that the orders are currently appealable, and HUL is prepared to assess the situation to exercise its right to appeal.
Despite the challenging regulatory landscape, it is essential to note that HUL, with a revenue of Rs 59,144 crore for the financial year ending on March 31, 2023, remains resilient and continues to focus on its operational excellence and strategic initiatives. Stakeholders will keenly observe the company's response and legal proceedings as it navigates through these GST challenges.
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