New Delhi, Apr 5 (PTI) The Directorate General of Safeguards has got a three-month extension till mid July to probe into alleged profiteering by FMCG firm Hindustan Unilever (HUL), a source said.

On January 16, DGS had served profiteering notice to the company for allegedly not passing on GST tax rate reduction benefit to consumers.

DGS had sought details from HUL about the prices of its entire range of products pre and post GST rate cut in November last year.

Even though HUL replied to the notice, the investigating authority asked for more information from the company which in turn sought more time to submit documents saying that the final accounts were being prepared as financial year was ending.

“Following that, DGS sought a three-month extension from the Standing Committee under the anti-profiteering authority. The extension till mid July has been granted to finalise the report on HUL,” a source told PTI.

The anti-profiteering rules under mandate DGS to complete its investigation within 3 months of notice. It may however seek an extension of further 3 months from the standing committee in case the investigation is not completed.

Meanwhile, HUL has offered to pay Rs 155 crore so far to the government to compensate for the gains it made by not passing on the rate cut benefits to consumers.

The source further said the amount has not been accepted pending investigation against the company.

HUL had said while the revised GST rate was initiated immediately on November 15, there was a lag on account of time required to change artworks on various products, order packing material, production and ensuring availability in stores.

“Hence, it was not possible to immediately pass on the benefit of the November 15 GST rate reductions to the end consumers,” HUL had said.

As part of investigation, DGS usually looks into company’s balance sheet, profit and loss account, GST returns and details of invoice wise outward taxable supplies.

The company is given a fortnight time to respond to the notice.

After examining the documents, DGS gives its report to the anti-profiteering authority for further action, which may include fine and extreme penalty like cancellation of registration.

This is published unedited from the PTI feed.