Baba Ramdev-led Patanjali Ayurved, which is preparing to respond to an anti-profiteering notice over its failure to reduce prices after goods and service tax (GST) rates were slashed, is likely to maintain that it was already operating at minimum profits, or margins, said people familiar with the matter.

The company is willing to share its balance sheet details and audit reports with the authorities if required, these people said, asking not to be named. The FMCG company was issued a notice by the director general of anti-profiteering after a complaint was filed alleging that it had not passed on the benefits of the November GST rate cuts to consumers.

The probe is likely to be completed within the next 3-6 months, the final report of which will be submitted to the national anti-profiteering authority. Based on the report, the authority will decide if any action needs to be taken against the firm.

Patanjali will contend that FMCG players had raised prices in months leading up to the introduction of GST, and therefore when rates were reduced, they were able to cut prices, said these people. But the company did not have the same elbowroom because it had not raised prices earlier. It was actually operating at minimum profits — prices are significantly low compared with competition, according to them.

Patanjali Ayurved said it has received the notice from the DG of anti-profiteering and will respond to it very soon.

Besides Patanjali, companies such as Jubilant Foodworks, Hardcastle Restaurants have also received notices from the authority on anti-profiteering issues.

The national anti-profiteering authority was set up under GST to protect consumers’ interest and to ensure that companies pass the tax cut benefits to them.

First Published:Aug 6, 2018 3:46 PM IST