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Drug Industry under Scanner,did they pass benefits of reduced tax to consumers?

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gst 373x280 - Drug Industry under Scanner,did they pass benefits of reduced tax to consumers?

New Delhi.If companies are not passing the benefits of reduced GST rates to consumers and patients,they are liable to fined. The anti-profiteering body under the GST framework is seeking details on pricing strategies from consumer goods companies and over-the-counter (OTC) drug makers to check whether they have passed on the benefits of reduced GST rates to consumers. A prominent Ayurveda-focused FMCG company, too, was asked for an explanation, The Economic Times reported.

gst 373x280 - Drug Industry under Scanner,did they pass benefits of reduced tax to consumers?

National Anti-profiteering Authority (NAA) has issued letters to various companies including Mankind Pharma, Johnson & Johnson, Nirma and Colgate Pamolive in the last few weeks, questioning their pricing strategies, people familiar with the matter told ET. In the past, some companies, including Patanjali Ayurved, Hindustan Unilever(HUL), Procter & Gamble (P&G), Nestle and Hardcastle Restaurants, had been either slapped with a fine or questioned for apparently failing to pass on the benefits of a tax rate reduction to consumers.
Industry insiders said many companies are finding it difficult to first calculate the amount of benefits accrued due to GST.“The focus is on sectors that directly impact the consumers, like FMCG, pharma and real estate,” said a person with direct knowledge of the matter.

“Letters seeking details were issued to at least 50 companies in last week alone, and sales heads of these companies were asked to give details of their cost accounting,” the person said.

 

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