Mr. Mohammad Azid Ramzani Vs M/s Adarsh Marbles (National Anti-Profiteering Authority)
It is revealed that the Central Govt. vide Notification No.41/2017-Central Tax (Rate) dated 14.11.2017 had reduced the rate of GST from 28% to 18% in respect of the tiles with effect from 15.11.2017. the benefit of which 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 discussion and the invoices available, it is revealed that the Respondent had increased the base price of the product from Rs. 750/- to Rs. 814/-, 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 rate reduction, the benefit of reduction in tax rate was not passed on to the Applicant No.1 by the Respondent.
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 amount of profiteering is determined as Rs. 54,67,149/- 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. The Respondent is also directed to deposit the profiteered amount of Rs. 54,67.149/- 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. The Respondent is further directed to refund an amount of Rs. 75/- (750*1.28 = 960 -750*1.1.8 = 885) to Applicant No. 1 along with the interest @ 18%. Since rest of the recipients in this case are not identifiable, the Respondent is directed to deposit the amount of profiteering of Rs. 27.33,537/- in the Central Consumer Welfare Fund (CWF) and Rs. 27,33,537/- in the Uttar Pradesh State CWF as per the provisions of Rule 133 (3) (c) of the CGST Rules, 2017. 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 Commissioner CGST/SGST as per the provisions of the CGST/SGST Act, 2017, under the supervision of the DGAP.
It is also established from the above facts that the Respondent had issued incorrect invoices while selling the above product to his recipients as he had incorrectly shown the base prices and had also compelled them to pay additional GST on the increased prices through the incorrect tax invoices which would have otherwise resulted in further benefit to the recipients. It is also established from the record that the Respondent has deliberately and consciously acted in contravention of the provisions of the CGST Act. 2017 by issuing incorrect invoices which is an offence under Section 122 (1) (i) of the above Act and hence he is liable for imposition of penalty under the above Section read with Rule 133 (3) (d) of the CGST Rules, 2017. Since he has not submitted his reply on the issue of penalty, therefore, in the interest of natural justice before imposition of penalty a notice is issued to him asking him to explain why penalty should not be imposed on him.
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING APPELLATE AUTHORITY
1. This report, dated 05.12.2018, 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 facts of the present case are that an application dated 22.02.2018 was filed by the Applicant No. 1 before the Uttar Pradesh State Screening Committee on Anti-profiteering constituted under Rule 128 of the above Rules alleging that the Respondent had not passed on the benefit of reduction in the rate of tax from 28% to 18% w.e.f. 15.11.2017. granted vide Notification No. 41/2017-Central Tax (Rate) dated 14.11.2017. as he had increased the base price of the “Vitrified Tiles” (here-in- after referred to as the product) from Rs. 750/- in the pre-rate reduction period to Rs. 814/- in the period post implementation of the notification dated 14.11.2017. The Applicant No. 1 had also claimed that since the Respondent had increased the MRP of the product after the rate of tax was reduced on it, he had indulged in profiteering in contravention of the provisions of Section 171 of the CGST Act. 2017 and hence appropriate action should be taken against him. In this regard, Uttar Pradesh State Screening Committee had relied on two invoices issued by the Respondent, one dated 06.11.2017 (Pre rate revision) and the other dated 09.12.2017 (Post rate revision), as has been discussed in table given below:-
Table
