After aiming for the popcorn industry in a similar classification order, the GST authorities have now drawn attention to Hammol. According to the CNBC-TV18 report, the DGGI Coimbatore Zone has launched a probe on whether Dabur’s popular hamol should be taxed to 12% as Ayurvedic medicine or 18% as a patisserie.
Dabur claims that hamola is rooted in Ayurveda and is not a “regular candy with cooked sugar”, which qualifies for a lower tax rate. The company has previously won a similar case during the GST era, when the Supreme Court ruled that the candy Hammola had fallen into the category of Ayurvedic medicine, not a patisserie.
This latest supervision adds to Dabur’s increasing list of tax troubles. April 1, the Company revealed a warrant for a re-estimate of income tax that required 110.33 crowns for the FY2017-18. Authorities have cited the wrong requirements for deductions for research and development and rejection in accordance with Section of the 14th of the Income Tax Act.
Regulatory challenges come while Dabur warns of slow growth in its latest financial update. For March, the company expects a consolidated revenue to remain “straight”, citing a decline in urban demand and inflation pressure. It is predicted that operational margins will be contracted by 150-175 base points.
Dabur’s Indian FMCG job is likely to fall in the sign of the middle single, the company said. However, international markets like me, Egypt and Bangladesh are expected to achieve a strong double -digit growth. Almost one quarter of Dabur’s revenue is now coming from global operations.
Among Dabur brands are Dabur Chyawanprash, real juices, Dabur Honey, Pudinhara, Lal tail, Amla Hair Oil and Red toothpaste.
