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Johnson & Johnson faces Rs 230 crore penalty for GST profiteering

Published
today Dec 26, 2019
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Personal care brand Johnson & Johnson has been served a Rs 230 crore ($34.6 million) fine by the National Anti-Profiteering Authority on goods and services profiteering charges.

Johnson & Johnson has been served GST profiteering charges

 
After continued allegations of contaminated baby-care products, Johnson & Johnson now faces GST profiteering charges for failing to pass on tax rate cuts to the consumer, ET Bureau reported. The business did not change the prices of its products between July 1 and November 14, 2017, when it should have accommodated a GST rate reduction from 28% to 18%, according to the authority.
 
“The methodology adopted by the respondent [Johnson & Johnson] while computing the benefit of tax reduction was illogical, unreasonable, arbitrary, and incorrect, and hence cannot be accepted,” said the National Anti-Profiteering Authority in its order on December 24.

“It is absolutely clear that the respondent has not commensurately reduced prices but has in fact increased them by adding tax costs and losses from November 15, 2017 on the base prices that he was already charging,” said the National Anti-Profiteering Authority. 
 
The organisation added that, as Johnson & Johnson fixes the prices of the products it manufacturers, it cannot blame retailers for its pricing. The business has been given three months to comply with the National Anti-Profiteering Authority and reduce its prices accordingly.

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