Dabur gets GST notice of ₹320.6 cr; to challenge tax demand

Dabur India, one of the leading FMCG companies in India with market capitalisation of over ₹95,698 crore, has received a Goods and Service Tax (GST) demand notice of ₹320.6 crore, the company says in a regulatory filing today. The Burman family-led company will challenge the tax notice “based on strong merits by way of filing its reply/ submissions, before the relevant authorities”.

The GST notice was sent by the Directorate General of Good and Services Tax Intelligence, Gurugram Zonal Unit, on October 16. The GST demand includes tax liability along with interest and penalty on the company.

“The company has received intimation of tax ascertained as being payable under Section 74(5) of CGST Act, 2017, wherein GST short paid / not paid amounting to ₹3,20,60,53,069 has been advised to be paid by the company along with the amount of applicable interest and penalty under Section 74(5) of COST Act, 2017, failing which show cause notice will be issued,” Dabur says in a BSE filing.

Dabur plans to review the intimation and evaluate the next steps in this matter. As per the company, there is no impact on the financial, operation or other activities of the company due to this intimation of tax being payable. “The impact will be limited to the extent of final tax liability as may be ascertained along with interest and penalty, if any,” it added.

The board meeting of Dabur, the world's largest ayurvedic and natural health care company, is scheduled on November 2 to consider and approve the financial results for the quarter and half year ending September 30, 2023, and to declare interim dividend on the equity shares of the company for the financial year 2023-24.

In Q1 FY24, Dabur posted a 3.5% growth in consolidated net profit at ₹456.61 crore as compared to ₹441.06 crore in the year-ago quarter. The consolidated revenue from operations grew by 10.9% to ₹3,130.47 crore in Q1 FY24 as against ₹2,822.43 crore in the corresponding period last year. 

Dabur’s consolidated revenue crossed the ₹3,000 crore mark for the first time in the first quarter, driven by strong double-digit growth in both home and personal care (HPC), and health care (HC) businesses.

The operating profit saw a growth of 11.2% to ₹604.7 crore versus ₹543.6 crore in the same period last year. The EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) rose 10.9% to 714.5 crore as compared to 644.2 crore in Q1FY23, while margin stood at 19.3% as compared to the year ago period.

The revenue from India business grew by 8% to ₹2,347 crore, while international business reported a 20.6% growth in constant currency terms and 10.2% in rupee terms.  The company saw strong consumer engagement and reported market share gain across 90% of the portfolio. In the hair oils category, Dabur gained 200 basis points (bps) to end the quarter at its highest-ever share of 17.4%, while Red Paste gained 50 bps market share, taking the overall toothpaste market share to 16.9%. Odomos expands by 340 bps, taking its share of the mosquito repellent category to 58.9%, while the market share of Chyawanprash reported a 320 bps gain during Q1FY24.