Indian Fast-Moving Consumer Goods ( FMCG ) major Dabur India Ltd., received a huge GST demand of Rs. 320.6 crore as confirmed by an order issued on November 25, 2024, by the Additional Commissioner, CGST Commissionerate, Chandigarh. The demand includes applicable interest but the order excluded penalties that were part of an earlier notice.
The order was initiated from a compliance review conducted by the Directorate General of Goods and Services Tax Intelligence (DGGSTI) which pointed out certain tax issues. The revised order was based on findings under Section 20 of the IGST Act, 2017 read with Section 74(9) of the CGST Act, 2017 which confirms a total demand of Rs. 320,60,53,070 as Integrated Goods and Services Tax (IGST) along with interest.
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The earlier notice issued on October 17, 2023, had imposed penalties but the November 25, 2024, order dropped these charges. This decision gave some relief to the company as it reviewed the matter and legal options.
Dabur’s Response
In its regulatory filing on November 26, 2024, Dabur explained that the GST order would have no impact on its operations or business activities. The company assured stakeholders that the financial implications would be limited to the final tax liability and applicable interest.
“The company is reviewing the order and calculating the next steps in the matter under applicable laws. There is no impact on the operation or other activities of the company due to this order. The financial impact will be limited to the extent of final tax liability as may be ascertained along with interest, if any,” Dabur said in its statement.
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The GST demand reflects the increasing scrutiny of tax compliance in India especially for large corporations. Many Large corporations have gone through scrutinization this year. As of November 10, 2024, net direct tax collections increased by 15.4% to Rs. 12.1 lakh crore after refunds of Rs. 2.91 lakh crore, compared to RS. 10.48 lakh crore in the same period last year. Gross tax collections rose by 21.2% year-on-year to Rs. 15.02 lakh crore. This rise in tax revenue reflects the government’s stricter focus on ensuring tax compliance.
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