Case Law Details
Sh. Pranesh Pathak Vs M/s. Bhutani International Medicos (NAA)
Central Government, on the recommendation of the GST Council, had reduced the GST rate on the product ‘Sanitary towels (pads) or sanitary napkins; tampons’ from 12% to Nil w.e.f. 27.07.2018, vide S. No. 146 of the Schedule to Notification No. 19/2018-Central Tax (Rate) dated 26.07.2018, which was not in dispute. The Report has further stated that from the invoices made available by the Respondent, it appeared that the base price of the product had increased inspite of GST rate reduction from 12% to NIL w.e.f. 27.07.2018. The Report has admitted that the Respondent had purchased the product at an average base price of Rs. 57.70/- while the average selling price of the same product during the said period was Rs. 60.58/-, thus, the profit margin for the Respondent during the pre-rate reduction period was Rs. 2.88/- per unit.
The Respondent vide his written submissions dated 10.06.2019 has stated that the DGAP had alleged that he had not passed on the benefit of rate reduction to the recipients. He has claimed that this act of negligence/mistake was not committed intentionally but was due to lack of knowledge. He has also claimed that the 12% GST which was wrongly collected was deposited with the Government along with the interest. The Respondent has also stated that without going into the merits of the case and to avoid litigation he has paid an amount of Rs. 5,283/- in terms of demand draft dated 06.06.2019 drawn on Yes Bank limited in favour of PAQ (HQ) CBEC, New Delhi. He has also claimed he was a law abiding citizen of India and the error of not passing on the benefit was not committed intentionally but was due to oversightness. He has also requested to drop the penalty proceedings if any and pass favourable order as deemed fit and proper by the Authority.
Based on the above discussion the Respondent is hereby directed to reduce the price of the product as per the provisions of Rule 133 (3) (a) of the CGST Rules, 2017, by making commensurate reduction in the price, keeping in view the reduction in the rate of tax so that the benefit is passed on to the recipients. The Authority also confirms and determines the profiteered amount at Rs. 5,282.51/- and directs the Respondent to deposit this amount along with interest @18% into the Central and Delhi State Consumer Welfare Fund in the ratio of 50:50 since the supplies have been made in the State of Delhi as per Rule 133 (3) (c) of the CGST Rules, 2017.
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING APPELLATE AUTHORITY
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