Cloudtail India Guilty of Profiteering for not passing rate reduction benefit

Shri Rahul Sharma Vs M/s. Cloudtail India Pvt. Ltd. (NAA)

(i) Firstly, the Respondent, as discussed in para 12 to 14 above, has submitted that the proceedings initiated should be deemed infructuous as the complaint under Section 171 of the CGST Act, 2017_;was not against him but against HP India who was the brand owner and who controlled the MRP and he being a retailer had no say in fixing the MRP. Though the complaint is against HP. the fact remains that the invoice quoted by the above Applicant, was issued by the Respondent on the e-commerce platform. Since, the product was sold by the Respondent and he being registered under GST, his obligation to pass on the benefit of rate reduction still remained and holds good. Section 127 (ii) of the CGST Rules, 2017, clearly states the Authority has to identify the registered person who has not passed on the benefit to the recipient and in this case, the Respondent was clearly that registered person. Therefore, the contention that the complaint is infructuous on this ground is untenable.

(ii) Secondly, the Respondent has further stated that the complaint filed by the Applicant was incomplete, inadequate and was not accurate and admittedly, he was not the actual purchaser and the claim of the Applicant stands invalidated as crucial details were missing and the MRP was also written manually. Rule 128 (2) of the CGST Rules, 2017, reads All applications from interested parties on issues of local nature shall first be examined by the State level Screening Committee and the Screening Committee shall, upon being satisfied that the supplier has contravened the provisions of Section 171, forward the application with its recommendations to the Standing Committee for further action”. Further Rule 137 (c) of the CGST Rules reads that “interested party” includes-

a. suppliers of goods or services under the proceedings; and

b. recipients of goods or services under the proceedings;

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