Jubilant FoodWorks turns bitter on illegal profiteering

The stock of Jubilant FoodWorks tanks 4 per cent as the national anti-profiteering agency asked the company to deposit a sum of Rs 41.42 crore earned illegally by withholding GST rate cuts to consumers. 

In November 2017, Goods and Services Tax (GST) was reduced from 18 per cent to 5 per cent without Input Tax Credit (ITC). Based on an email complaint sent by a consumer against Jubilant FoodWorks, the National Anti-Profiteering Authority (NAA) ruled that the company did not pass on the benefit of reduction in the GST rate to its customers in the period November 15, 2017 to May 31, 2018. The authority demand that Jubilant deposit an amount of Rs 41.42 crore towards the illegal gains earned during the period in state and central consumer welfare funds along with interest rate of 18 per cent till the amount is deposited.

In response to this order, the company has said that it has followed the spirit of the law and passed the benefits of GST to its customers but claimed that Jubilant FoodWorks incurred a loss due to Input Credit withdrawal which was higher than the price increase. The company said that NAA hasn't taken this factor into account. The company added that it is studying the order and will decide on its future course of action accordingly.

On Tuesday, the stock of Jubilant FoodWorks was trading in the negative zone. At 11:02 hours, the stock was quoting Rs. 1,336.45 per share, down by Rs. 56.70 or 4.07 per cent on BSE. While the benchmark index was at 36,622.18, up by 39.44 points or 0.11 per cent.