Shri Kumudchandra Atmaram Patel Vs M/s TTK Prestige Limited (National Anti-Profiteering Authority)
Respondent had increased the base price of the product from Rs. 1,640.62 to Rs. 1,779.66, when the rate of tax was reduced from 28% to 18% with effect from 15.11.2017.Thus, by increasing the base price of the product, post-GST, the benefit of reduction in tax rate was not passed on to the recipients. The total amount of profiteering during the period 15.11.2017 to 31.10.2018 is Rs. 13,973/- and this amount is inclusive of Rs. 535/- which is the profiteered amount in respect of the Applicant. The Respondent has also agreed to deposit this alleged amount along with interest, in his submission dated 05.02.2019 filed before this Authority.
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING APPELLATE AUTHORITY
This Report, dated 14.01.2019, has been received by this Authority from the Director General of Anti-Profiteering (DGAP) under Rule 129 (6) of the Central Goods and Service Tax (CGST) Rules, 2017. The brief facts of the present case are that an application dated 29.08.2018 was filed by the Applicant No. 1 before the Standing Committee on Anti-Profiteering constituted under Rule 128 of the above Rules alleging that the Respondent did not pass on the benefit of reduction in the GST rate from 28% to 18% by increasing the base price to maintain the same cum-tax selling price which was referred to as the product) from the outlet of the Respondant, on 06.08.2018 where he had charged GST @ 28% in the invoice No. 001252 dated 06.08.2018. However, after objection by the Applicant, the Respondent issued a new invoice No. 001403 dated 24.08.2018 charging GST @ 18%. He further stated that the Respondent had increased the base price of the impugned goods from Rs. 1640.62 to Rs. 1779.66 to maintain the same cum-tax selling price (Rs. 2100/-), even after charging GST at the lower rate of 18%. The applicant had also claimed that the Respondent had indulged in profiteering in contravention of the provision of section 171 of the CGST Act,2017 and hence appropriate action should be taken against him.
2. The Standing Committee vide the minutes of its meeting dated 08.10.2018 had requested the DGAP to conduct a detailed investigation under Rule 129 (1) of the CGST Rules, 2017.
3. A notice under Rule 129 of the CGST Rules, 2017, was issued on13.11.2018, by the DGAP, calling upon the Respondent to reply as to whether he admitted that he had contravened the provisions of Section 171 of the CGST Act, 2017, and that the benefit of reduction in GST rate had not been passed on to the recipients by way of commensurate reduction in price. The Respondent was also asked to suo-moto determine the quantum of profiteering, if any, and indicate the same in his reply to the notice issued by the DGAP. The DGAP had also called upon the Respondent to submit certain documen like GST Returns (1 & 3B), details of outward taxable supplies, The DGAP had also called upon the Applicant vide e-mail dated 07.01.2019, to inspect the non-confidential evidences/reply furnished by the Respondent between 08.01.2019 to 09.01.2019 which was not availed by the Applicant.
4. The Respondent had submitted replies vide his letters dated 22.11.2018 and 07.12.2018, and stated that he had refunded the differential amount arising on account of reduction in the rate of GST from 28% to 18% to the Applicant. The Respondent also stated that total 44 numbers of the product were sold during the period 15.11.2017 to 31.10.2018. Hence, the quantum of benefit to be passed on was Rs. 7,216/- (@ Rs. 164/- per unit). He also enclosed the computation and proof of such refund, as per details furnished in table A below:-
Table-A
