Kerala State Level Screening Committee on Anti-Profiteering Vs Phillips India Ltd. (NAA)
The brief facts of the case are that the Applicant No. 1 vide the minutes of its meeting held on 08.05.2018 had referred the present case to the Standing Committee on Anti-profiteering, alleging profiteering by the Respondent on the supply of “Food Processor” (HSN: 85094090), by not passing on the benefit of GST at the time of implementation of the GST w.e.f. 01.07.2017. It was also alleged that the Respondent Phillips India Ltd. had indulged in profiteering in contravention of the provisions of Section 171 of the CGST Act, 2017.
Respondent has contended that he had not profiteered and has not contravened the provisions of Section 171 of the CGST Act, 2017, it is clear from the DGAP’s report that the Respondent has profiteered an amount of Rs. 4,53,949, the state-wise break-up of which is provided in the Para-22 of this Order. Further, it is also observed that the DGAP has computed the amount of profiteering based on document/data provided by the respondent himself. Therefore, it was hekd that Respondent Phillips India Ltd. had has profiteered by an amount of Rs. 4,53,949/-.
It is evident from the details furnished in Annexure-17 & 18 that the profiteering is determined as Rs. 4,53,949/- as per the provisions of Rule 133 (1) of the CGST Rules, 2017. The Respondent is therefore directed to reduce the price of the impugned product as per the provisions of Rule 133 (3) (a) of the CGST Rules, 2017, keeping in view the reduction in the rate of tax so that the benefit is passed on to the recipients. The Respondent is also directed to deposit the profiteered amount of Rs. 4,53,949/- along with the interest to be calculated © 18% from the date when the above amount was collected by him from the recipients till the above amount is Since the recipients, in this case, are not identifiable, the Respondent is directed to deposit the amount of profiteering of Rs. 2,26,975/- in the Central Consumer Welfare Fund (CWF) and Rs. 2,26,974/- in the State CWFs as per the provisions of Rule 133 (3) (c) of the CGST Rules, 2017, as mentioned in the Annexures- 17 & 18, along with 18% interest. The above amount shall be deposited within a period of 3 months from the date of receipt of this order failing which the same shall be recovered by the Commissioners CGST/SGST of the concerned State/Zone as per the provisions of the CGST/SGST Act, 2017.
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING AUTHORITY
ORDER
1. The present report dated 26.09.2018, has been received from the Director-General of Anti-Profiteering (DGAP) after a detailed investigation under Rule 129 (6) of the Central Goods & Service Tax (CGST) Rules, 2017. The brief facts of the case are that the Applicant No. 1 vide the minutes of its meeting held on 08.05.2018 had referred the present case to the Standing Committee on Anti-profiteering, alleging profiteering by the Respondent on the supply of “Food Processor” (HSN: 85094090), by not passing on the benefit of GST at the time of implementation of the GST w.e.f. 01.07.2017. It was also alleged that the Respondent had indulged in profiteering in contravention of the provisions of Section 171 of the CGST Act, 2017. In this regard, the above Applicant had relied on two invoices issued by the Respondent, one dated 09.05.2017 (Pre-GST) and the other dated 22.12.2017 (Post-GST).
2. The above reference was examined by the Standing Committee on Anti-Profiteering and was further referred to the DGAP vide minutes of its meeting dated 02.07.2018 for detailed investigations under Rule 129 (1) of the CGST Rules, 2017.
3. The DGAP vide his report dated 26.09.2018 has stated that after scrutiny of the two invoices issued by the Respondent, it was observed that in the pre-GST era, the applicable tax rate on the product “Food Processor” (HSN Code 85094090 was 26.24%, including Excise duty @ 12.5% (abatement ©35% of MRP) and VAT ©14.5%. On implementation of GST w.e.f. 01.07.2017, the GST rate on the said product was fixed at 28%. However, the invoice dated 12.2017, retied on by Kerala State Screening Committee has been issued after GST rate reduction w.e.f. 15.11.2017, vide Notification No. 41/2017-Central Tax (Rate) dated 14.11.2017 wherein the GST has been charged at the lower rate of 18%. The DGAP further stated that in the absence of any invoice issued during the period 01.07.2017 to 14.11.2017, it was not possible to compare the pre-GST and post-GST actual selling price.
4. The DGAP further stated that since the allegation of profiteering was based on the observation that the pre-GST and post-GST MRP were the same, a comparison of pre and post-GST tax rates was done taking the MRP as the selling price. In this case, as could be seen from the invoices evidence sent by the Applicant No. 1 that the pre-GST and post-GST MRP was the same, i.e. Rs. 5795/. The pre-GST & post-GST MRP-wise details of the base price and the tax rate applicable to the said product supplied by the Respondent were furnished by the DGAP as is given in the Table below wherein DGAP observed that after implementation of GST w.e.f. 01.07.2017 the rate of tax had gone up from 26.24% to 28%.
TABLE
