The Directorate General of GST Intelligence (DGGI) is probing the recent deal between Godrej and Raymond, where Raymond sold its consumer goods business to a Godrej unit for ₹2,825 crore. The DGGI has asked Raymond Consumer Care Ltd (RCCL) to explain why GST should not be levied on the transaction amount. The investigation is being conducted by the Mumbai unit of the DGGI, and they have also conducted inspections on premises linked to Raymond as part of the probe. Officials have the authority to conduct inspections under Section 67 of the CGST if they suspect a person is evading tax by suppressing information.

A Raymond spokesperson clarified that it was an inspection by the DGGI and not a search. They stated that they have provided suitable explanations and documentary evidence to show that the sale of the business to Godrej Consumer Products Ltd (GCPL) on a going concern basis does not attract GST. GCPL has not responded to queries regarding the matter.

The DGGI believes that the deal should attract GST at 18% and is studying the documents provided by the companies. Earlier this year, GCPL signed an agreement to acquire Raymond’s Consumer Care business, which includes brands like Park Avenue and Kamasutra.