Godrej Consumer Products’ shares were down on Monday after its acquisition of a consumer goods business reportedly came under the goods and services tax (GST) scanner.
What Happened: The Directorate General of GST Intelligence (DGGI) is currently investigating a deal where Godrej acquired Raymond’s consumer goods business in April 2023, the Economic Times reported, citing sources.
GST authorities are questioning whether GST should apply to this ₹2,825 crore transaction. DGGI has also sought an explanation from Godrej Consumer Products Ltd (GCPL), the acquirer, and inspected Raymond’s premises in Mumbai.
Raymond stated that the transaction, a slump sale of the business as a going concern, is not subject to GST. DGGI contends that the deal is subject to 18% GST.
The enforcement body is reviewing documents provided by the company. This investigation follows GCPL’s acquisition of the fast-moving consumer goods company, which includes popular consumer brands.
Get all the latest Share Market trends and news to set you up for the week ahead.
The business includes popular brands including Park Avenue, KamaSutra and Premium. Raymond’s Consumer Care business reported ₹522 crore in sales for the financial year 2022.
The investigation is ongoing, and further updates may be provided in the future.
Price Action: Godrej Consumer Products’ share price dropped 1.02% to ₹977.20 around noon on Monday.
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.