DG Anti Profiteering Vs Lifestyle International Pvt. Ltd. (GSTAT)
The GST Appellate Tribunal (GSTAT) considered whether M/s Lifestyle International Pvt. Ltd. had profiteered by not passing on the benefit of a reduction in the GST rate on Fast Moving Consumer Goods (FMCG) from 28% to 18% with effect from 15 November 2017. The proceedings originated from a complaint alleging that the benefit of the GST rate reduction had not been passed on to consumers in respect of a product purchased from the retailer.
The Directorate General of Anti-Profiteering (DGAP) initially investigated the complaint and concluded that profiteering had occurred. An order was passed directing refund of a small amount to the complainant and deposit of the remaining amount into Consumer Welfare Funds. However, the National Anti-Profiteering Authority (NAA) also directed further investigation after the respondent claimed that although the benefit may not have been passed on to the specific customer, larger benefits had been passed on to other customers through price reductions.
Following further investigation and re-computation, the DGAP concluded that the respondent had realized an additional amount of ₹13,61,51,254 during the period from 15 November 2017 to 31 January 2018. The investigation found that the respondent increased the base prices of impacted products despite the reduction in GST rates. The profiteered amount was calculated by comparing average pre-rate reduction prices with actual invoice-wise prices charged after the tax reduction. The computation covered approximately 25.97 lakh transactions and included excess GST collected on increased base prices.
