HUL shares trade lower on Rs 447-crore GST demand

Shares of FMCG giant Hindustan Unilever traded almost a percent lower to Rs 2,636 in early trade on January 2 after the company was slapped a Rs 447.5-crore GST demand.

The company received a total of five orders passed by Goods and Services Tax (GST) officials from different zones, addressing issues such as the disallowance of GST credit and salaries, including allowances paid to expatriates, on Friday and Saturday last week.

At 9:20am, the counter was trading at Rs 2,642, down 0.5 percent from the previous close on the NSE. In the last one year, the FMCG bellwether has gained a marginal 3.5 percent.

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The charges include the demand for tax on salaries, including allowances paid to expats amounting to Rs 372.82 crore and a penalty of Rs 39.90 crore. The joint commissioner of CGST and Central Excise, Mumbai East, and the deputy commissioner and commercial tax officer of Bengaluru have issued the demand of tax on grounds of excess GST availed of amounting to Rs 8.9 crore.

Also read: HUL: After splitting beauty and personal care, what’s next?

The excise and taxation officer in Sonipat issued a demand order disallowing GST credit of Rs 12.94 crore and imposing a penalty of Rs 1.29 crore. The additional commissioner of central tax and central excise in the Kochi Commissionerate disallowed GST credit and turnover adjustment of Rs 8.65 crore, along with a penalty of Rs 87.50 lakh.

“There is no material impact on financial, no impact on operation or other activities of HUL due to the intimation of tax payable. These orders are currently appealable and we will make an assessment to exercise our right to appeal,” HUL said in a regulatory filing on January 1.

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