FMCG major Hindustan Unilever (HUL) has posted a net profit of ₹1,326 crore, up 28 per cent, in the quarter ending December 31, 2017, against ₹1,038 crore in the year-ago period.
However, the net income rose marginally by 4 per cent at ₹8,742 crore during the quarter compared with ₹8,400 crore in the corresponding quarter last year which the company has attributed to the inclusion of excise duty and other net input taxes along with the GST refunds of ₹119 crore during the quarter.
HUL has created a consumer welfare fund, wherein the company has set aside about ₹119 crore, which is the benefit that the comany got from the reduction in GST rates in November after the Government slashed tax rates for several categories from 28 per cent to 18 per cent.
While the benefit was supposed to be passed on to the consumers during the quarter, it was not possible to do so and that it had suo moto approached the CBEC to not consider this amount as revenue.
Srinivas Phatak, CFO, said: "We have left it to the Government to take a decision on how the GST benefit amount collected be used. We have approached the CBEC (Central Board of Excise and Customs) suo moto and since there is an absence of clear legal provisions on this subject, they have forwarded our request to the DGS and we are awaiting their guidance on this matter. We have not recognised it as a revenue and holding it as a liability in our books."
He further indicated that if the DGS asks to pass on the benefits to directly to the consumers then the market could witness some massive promotions and discounts in the coming days.
The company said that despite challenges and a year of reforms, the company has been able to withstand the pressures and has been agile in to combat issues rising out of GST related changes.