Winning Bizness Desk

Mumbai. The Directorate General of GST Intelligence (DGGI) is reportedly investigating the recent deal between Raymond and Godrej. Earlier this year, Godrej Consumer Products had announced that it has entered into an agreement to acquire the FMCG business of Raymond Consumer Care Ltd, a leading player in the deodorant and sexual wellness categories in India. According to reports, GST officials have asked Raymond Consumer Care to explain why GST should not be levied on the transaction amount of the deal. Godrej Consumer Products had paid Rs 2,825 crore to Raymond for the deal. In this deal, the FMCG business along with the trademarks of Park Avenue, KS, Kama Sutra and Premium were acquired.

DGGI also inspected premises

The DGGI also inspected premises allegedly linked to Raymond. A spokesperson for Raymond told the media that it was an inspection and "not a search". The spokesperson said they have given a suitable explanation along with documents to prove that the sale does not attract GST. “Based on the structure of the transaction and the opinion of independent tax experts sought by both parties, there is no GST on this transaction as it was a going concern sale,” the spokesperson said. Announcing the deal in April, GCPL MD and CEO Sudhir Sitapati had said that the acquisition will allow the company to complement its business portfolio and growth strategy with under-penetrated categories.

Wht Raymond Group had said ?

Atul Singh, Group Vice Chairman, Raymond Group, had said, 'We have sold our FMCG business along with the trademarks of Park Avenue, Kamasutra to Godrej Consumer Products. We take pride in building strong domestic brands that are leaders in their categories. Godrej Consumer Products will provide the necessary impetus to drive the growth of these brands. Categories like deodorants and sexual awareness, where Raymond is a leading player, have the potential to grow in double digits in the coming decades given the low per capita consumption in India compared to similar emerging markets. Sitapati said his aim is to unlock the potential of these categories.