Glenmark found guilty of not passing GST rate cut on sanitary napkin to customers

The all-powerful GST Council headed by the finance minister in July 2018 had reduced the tax rate on a sanitary napkin from 12 per cent to nil and it was expected that the companies would pass on the entire benefit of a rate cut to the customers.

New Delhi: Anti-profiteering watchdog has held Glenmark Pharmaceuticals Ltd guilty of not passing GST rate cut benefit on a sanitary napkin to customers.

The all-powerful GST Council headed by the finance minister in July 2018 had reduced the tax rate on a sanitary napkin from 12 per cent to nil and it was expected that the companies would pass on the entire benefit of a rate cut to the customers.

The Directorate General of Anti-Profiteering (DGAP) found that the decision of cutting goods and services tax (GST) rate to nil resulted in an additional burden of 8.39 per cent on account of non-availability of input tax credit (ITC).

However, the price should have come down as the rate cut was sanitary napkin was 12 per cent but Glenmark Pharmaceuticals did not reduce the prices.

The National Anti-profiteering Authority (NAA) after hearing the contention of the company ruled that Glenmark has "denied the benefit of rate reduction to the buyers of product sanitary napkin...and resorted to profiteering" and would be liable for penalty under the GST law.

The NAA determined the quantum of profiteering illegally obtained by the Glenmark at Rs 42.52 lakh and asked the company to deposit the amount in the ratio of 50:50 to Centre or State Consumer Welfare Fund along with the interest of 18 per cent till it is deposited.

The order was given by NAA on an application filed by the Commissioner of Central Goods and Services Tax, Mumbai West.