Tax officials: According to sources cited by The Economic Times, the Directorate General of GST Intelligence (DGGI) is looking into Raymond’s consumer goods business sale to a Godrej unit.
Through a slump sale, Raymond’s FMCG company—which included the Park Avenue, KS, KamaSutra, and Premium trademarks—was purchased by Godrej Consumer Products (GCPL) in April 2023.
GCPL disclosed that it paid ₹2,825 crore for this acquisition in a filing with the stock exchanges.
Investigations are still ongoing.
Authorities have raised concerns about whether GST should be applied to the transaction amount and have asked Raymond Consumer Care (RCCL) to provide an explanation, according to the report. They have also requested an explanation from GCPL regarding this transaction, according to the statement.
The DGGI’s Mumbai unit conducted an inspection of Raymond-related premises as part of its investigation, according to the report. This action is based on Section 67 of the Central GST (CGST) Act, which gives officials the authority to conduct inspections if they suspect relevant information has been withheld in order to evade tax.
Tax officials think that 18% GST ought to apply to the Raymond-Godrej agreement. They are currently going over the submitted documents and the justifications from the relevant parties.
Business Perspective
The DGGI inspection was “in respect of the specified transaction and not a search,” a representative for Raymond told the newspaper.
“We have furnished a fitting justification and substantiated the assertion that the going concern sale of the enterprise to GCPL is exempt from GST,” the company declared.
According to the statement, both parties “sought an independent tax expert’s opinion to confirm that no GST applies since it was a going concern slump sale of the business.”
GCPL has not answered questions.
RCCL recorded sales of ₹522 crore for FY22. The company holds the third-largest position in the branded condom market and is a prominent participant in the men’s deodorants category, placing it among the top five. In the mainstream soap and shampoo market, though, its market share is lower.
