After targeting the popcorn industry in a similar classification line, TPS authorities have now turned their attention to Hajmola. According to a CNBC-TV18 report, the DGGI Coimbatore zone launched an investigation to find out if the popular Candy Hajmola in Dabur should be taxed at 12% as ayurvedic drug or 18% as a confectionery.
Dabur maintains that Hajmola is rooted in Ayurveda and is not a “regular sugar candy”, qualifying it for the lower tax rate. The company had previously won a similar case during the pre-GST era, when the Supreme Court judged that Hajmola Candy had fallen under the category of Ayurvedic medicine, not the confectionery.
The latter control adds to the growing list of Dabur’s tax problems. On April 1, the company revealed an order for re-evaluation of income tax requiring 110.33 sterling books for the 2017-18 financial year. The authorities allegedly allegedly allegedly complained about the deductions and prohibitions of R&D under article 14A of the income tax law.
The regulatory challenges arise while Dabur warns against slow growth in its last financial update. For the March quarter, the company expects consolidated revenues to remain “flattens”, citing a drop in urban demand and inflationary pressure. The operating margins should contract by 150 to 175 base points.
FMCG activities in Dabur India should decrease in mid-chiffre, said the company. However, international markets such as Mena, Egypt and Bangladesh should offer strong two -digit growth. Almost a quarter of Dabur’s revenues now come from global operations.
Among Dabur’s power marks are Dabur Chyawanprash, real juices, Dabur honey, Pudinhara, tail LAL, AMLA hair oil and red toothpaste.
