D.S. Brothers Vs Durga Marketing Pvt. Ltd. (NAA)
The brief facts of the case are that an application was filed by the Applicant No. 1 before the Standing Committee on Anti-profiteering, under Rule 128 of the CGST Rules, 2017 alleging profiteering by the Respondent in respect of the supply of “Duracell Battery AA/6” (hereinafter referred as the product) supplied by the Respondent. Applicant No. 1 had alleged that the Respondent did not reduce the selling price of the product when the GST rate was reduced from 28% to 18% w.e.f. 15.11.2017, vide Notification No. 41/2017 Central Tax (Rate) dated 14.11.2017 and the price of the product remained the same and thus the benefit of reduction in GST rate was not passed on to the recipients by way of commensurate reduction in the price, in terms of Section 171 of the CGST Act, 2017.
We have carefully considered the Reports filed by the AP, submissions of the Respondent, and other material placed on record and it has been revealed that the Central Government, on the recommendation of the GST Council, had reduced the GST rate on the “primary cells & primary Battery” (HSN-8506) from 28% to 18% w.e.f. 15.11.2017, vide Notification No. 41/2017 Central Tax (Rate) dated 14.11.2017, the benefit of the same was required to be passed on to the recipients by the Respondent as per the provisions of Section 171 of the CGST Act, 2017.
From the above facts and discussion, it is evident that the Respondent did not reduce the selling price of the products mentioned above when the GST rate was reduced from 28% to 18% w.e.f. 15.11.2017 and hence, the benefit of reduction in GST rate was not passed on to the recipients by way of commensurate reduction in the prices, in terms of Section 171 of the CGST Act, 2017 and therefore, he has contravened the provisions of Section 171 of the CGST Act, 2017.
Based on the above facts, it is established that the Respondent has acted in contravention of the provisions of Section 171 of the CGST Act, 2017, and has not passed on the benefit of reduction in the rate of tax to his recipients by commensurate reduction in the prices. Accordingly, the profiteered amount is determined as Rs. 1,57,200/- as per the provisions of Rule 133 (1) of the CGST Rules 2017. The Respondent is therefore directed to reduce the prices of his products 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. Accordingly, the Respondent is required to deposit the profiteered amount of Rs. 1,57,200/- 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 deposited in terms of Rule 133 (3) (b) of the CGST Rules, 2017. Since the recipients, in this case, are not identifiable, the Respondent is directed to deposit the amount of profiteering of Rs. 1,57,200/- along with interest in the CWFs of the Central and concerned State Governments as per the provisions of Rule 133 (3) (c) of the CGST Rules, 2017 in the ratio of 50:50 along with interest @ 18% till the same is deposited.
The Respondent has made a payment of Rs. 95,585/- through demand draft No, 145728 dated 21.01.2020 into the account of Consumer Affairs Department, Rajasthan and Rs. 95,585/- through demand draft No. 145729 dated 21.01.2020 into the Central Consumer Welfare Fund which has been taken on record. Since the Respondent has paid the entire profiteered amount of Rs. 1,57,200/- along with interest @ 18% of Rs. 39,969/-, thus, he is apparentaly not liable for imposition of penalty under the provisions of Section 171 (3A) of the CGST Act, 2017.
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING APPELLATE AUTHORITY
1. The present Report dated 18.12.2019 had been received from the Applicant No. 2 i.e. 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 an application was filed by the Applicant No. 1 before the Standing Committee on Anti-profiteering, under Rule 128 of the CGST Rules, 2017 alleging profiteering by the Respondent in respect of the supply of “Duracell Battery AA/6” (hereinafter referred as the product) supplied by the Respondent. Applicant No. 1 had alleged that the Respondent did not reduce the selling price of the product when the GST rate was reduced from 28% to 18% w.e.f. 15.11.2017, vide Notification No. 41/2017 Central Tax (Rate) dated 14.11.2017 and the price of the product remained the same and thus the benefit of reduction in GST rate was not passed on to the recipients by way of commensurate reduction in the price, in terms of Section 171 of the CGST Act, 2017.
2. Applicant No. ‘I had relied upon two invoices issued by the Respondent as per the details contained in the table given below:-
Table
