Case Law Details
Director General of Anti-Profiteering Vs Krishna Trading Company (National Anti-Profiteering Authority)
The Respondent has admitted in his submissions that he was aware of the above tax reductions and hence he should have immediately reduced his sale prices commensurate with the rate reductions. He also cannot claim that he has not reduced the prices of the above 116 products as their prices were not reduced by M/s Nestle India Ltd. The Respondent has also not produced any evidence to prove that M/s Nestle India Ltd. had increased the prices after the rate reductions. There is also no evidence to suggest that the Respondent had raised the issue of price reductions with M/s Nestle India Ltd. after the tax reductions were notified, therefore, he cannot shift his responsibility to comply with the provisions of Section 171 (1) of the above Act on M/s Nestle India Ltd. Pendency of profiteering proceedings against M/s Nestle India Ltd. also has no connection while determining accountability of the Respondent for profiteering under Section 171 (1) of the above Act as he is responsible for passing on the benefit on his own account. Granting of discounts also does not amount to passing on of the benefit of tax reductions as they have been given as a normal trade practice by the Respondent. The Respondent could also not have passed the benefit of tax reduction which was available on the purchase of one product on the other product as this benefit was required to be passed on every product to each customer who had purchased that product as per the provisions of Section 171 (1) of the above Act. Accordingly, the above contentions of the Respondent cannot be accepted.
It is clear from the narration of the facts stated above that the Respondent has indulged in profiteering in violation of the provisions of Section 171 (1) of the CGST Act, 2017 and has not passed on the benefit of reductions of tax given vide Notification No. 41/2017-Central Tax (Rate) dated 14.11.2017 and Notification No. 06/2018 dated 25.01.2018 in respect of the 116 products as per the details given in para supra to his customers and has thus profiteered an amount of Rs. 16,45,559/- therefore, he is liable for action under Rule 133 of the CGST Rules, 2017.
Accordingly, a sum of Rs. 16,45,559/- is determined as the profiteered amount in respect of the 116 products including an amount of Rs. 14,62,981/- which has been profiteered in respect of 81 products on which the rate of tax was reduced from 28% to 18% and an amount of Rs. 1,69,379/- on 32 products on which the GST was reduced from 18% to 12% w.e.f. 15.11:2017 and 3 products on which the tax rate was reduced from 18% to 12% w.e.f. 25.01.2018, as per the provisions of Rule 133 (1) of the CGST Rules, 2017. The Respondent is directed to reduce the sale prices of the above products immediately commensurate with the reductions in the rates of tax as were notified on 14.11.2017 and 25.01.2018 respectively and pass on the benefit of reductions in the rates of tax to his customers. Since the recipients in this case are not identifiable, the Respondent is directed to deposit the amount of profiteering of Rs. 8,22,779.50 in the Central Consumer Welfare Fund (CWF) and Rs. 8,22,779.50 in the Delhi State CWF as per the provisions of Rule 133 (3) (c) of the CGST Rules, 2017. along with 18% interest PA from the date from which the above amount was realised by the Respondent from his customers, as all the supplies were made in the State of Delhi. The above amount shall be deposited within a period of 3 months from the date of this order failing which the same shall be recovered by the Commissioner CGST/SGST as per the provisions of the CGST/SGST Act, 2017.
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING AUTHORITY
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