Case Law Details

Case Name : Kerala State Screening Committee on Anti-profiteering Vs M/s. Maruti Suzuki India Ltd (National Anti-Profiteering Authority)
Appeal Number : Case No. 1/2019
Date of Judgement/Order : 02/01/2019
Related Assessment Year :

M/s Maruti Suzuki India Ltd. Vs Director General Anti-Profiteering Central Board of Indirect Tax (National Anti-Profiteering Authority)

We have carefully considered the DGAP’s Report and the documents placed on record to examine whether there was any reduction in the rate of tax during the implementation of the GST and whether the benefit of reduction in the rate of tax was passed on or not to the recipient as provided under Section 171 of the CGST Act, 2017. First of all it is observed that the rate of tax was 15.63% in the pre-GST era which was increased to 29% in the post-GST era, as could be seen from the tabulation shown in Table-B above. Secondly from the invoices referred above, it is evident that before discount base prices of all the products had remained the same. These facts have also not been disputed by the representative of the Applicant No.1. Hence the provisions of Section 171 of the CGST Act 2017 are not attracted.

FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING AUTHORITY

1. The present Report dated 28.09.2018, has been received from the Applicant No. 2 i.e. The Directorate General of Anti-Profiteering (DGAP) after detailed investigation under Rule 129 (6) of the Central Goods & Service Tax (CGST) Rules, 2017. The brief facts of the case are that the Kerala State Screening Committee on Anti-Profiteering, vide the minutes of it’s meeting held on 08.05.2018 had referred the present case to the Standing Committee on Anti-profiteering, alleging profiteering by the Respondent on supply of four models of Motor Car, namely, `Wagon R VXI AMT’. ‘Swift VX1’, ‘Alto 800 LXI’ & Wagon R VXI’ (HSN code- 8703), by not passing on the benefit of reduction in the rate of tax at the time of implementation of GST w.e.f. 01.07.2017. In this regard, the Kerala State Screening Committee relied on two invoices issued for each of the four products by the Respondent, the details of the invoices are furnished in Table-A below:

Table-A
Particulars
Wagon R AMT
Swift VXI (0)
Wagon R VXI
Alto 800 LXI
Pre- GST
Post- GST
Pre- GST
Post- GST
Pre-GST
Post- GST
Pre-GST
Post-GST
Invoice No.
11809050
11931762
11608607
1143723
11614808
1130822
11618491
1124140
Invoice Date
02.06.17
19.07.17
03.04.17
15.09.17
04.04.17
19.09.17
05.04.17
15.09.17

2. The above application was examined by the Standing Committee on Anti-Profiteering and was further referred to the DGAP vide minutes of it’s meeting dated 02.07.2018 for detailed investigations under Rule 129 (1) of the CGST Rules, 2017.

The DGAP has stated in his Report dated 28.09.2018 that the two invoices issued for each of the four products by the Respondent were scrutinized and it was observed that in the pre-GST era, the products namely, ‘Wagon R VXI AMT’, ‘Swift VXI’, ‘Alto 800 LXI’ & Wagon R VXI’ (HSN code 8703) attracted total 15.63% duty incidence which included Central Excise Duty 12.50%, CST @ 1%, National Calamity Contingent Duty (NCCD) © 1%, Auto Cess @ 0.125% and Infra Cess @1%. On implementation of GST, w.e.f. 01.07.2017, the GST rate on the above models was fixed at 29% which included Central GST © 14%, State GST @ 14% and Compensation Cess @ 1%. The pre-GST & post-GST sale invoice-wise details with the applicable tax rate and discounted price (excluding VAT or GST) of the said products supplied by the Respondent are furnished in Table-B below:-

Table-B

Particulars
Wagon R AMT
Swift VXI (0)
Wagon R VXI
Alto 800 LXI
Pre-GST
Post- GST
Pre-GST
Post- GST
Pre- GST
Post- GST
Pre- GST
Post-GST
Invoice No.
11809050
119317 62
11608607
114372 3
116148 08
113082 2
116184 91
1124140
Invoice Date
2.6.17
19.7.17
3.04.17
15.9.17
4.4.17
19.9.17
5.4.17
15.9.17
Base Price
(Before Discount)
A
335,599
335,599
403,632
403,632
310,723
310,723
210,128
213,012
Freight &
Admin Charges
B
559
559
559
559
559
559
559
559
Discount
C
8,135
7,945
1,814
1.604
7,601
11,054
13,959
17.930
Net Base Price (After Discount)
D=A +B-C
328,023
328,213
402,377
402,587
303,681
300,228
196,728
195,641
Assessable Value for Duty Purpose
E
326,273
326,921
399,377
400,132
301,931
298,936
194,228
193,579
Excise Duty
@12.5%
F=E* 12.5%
40,784
49,922
37.741
24,278
NCCD @ 1%
G=
E*1 0/0
3,263
3,993.77
3,019
1,942
Auto Gess @ 0.125%
H=E* 0.12 5
408
499
377
243
Infra Cess
@1%
i= E*1
3,263
3,993.77
3,019
1,942
CB. @ 1% ..”-
J=10/0of (E to I)
3,740
4,577.86
.
3,461
2,226
GST @ 29%
K=E* 29%
94,807
116,038
86.691
56.138
Total Duty/Tax
L=Su m of (F to J) or
K
51,457
94,807
62,987
116,038
47,618
86,691
30,632
56,138
Ex-Factory Price
M’ D +L
379,480
423,020
465,364
518,625
351,299
386,919
227,360
251.779
Tool kit & Jack including tax
N
463
458
550
545
458
458
438
438
Freight including Service tax
o
25,201
24,116
27,144
25,975
25,201
24,116
23.432
21,942
Service Charge including Service Tax
P
784
682
839
730
743
642
80
503
GST @ 29% on Freight and Service Charge
0=2 9% of 0+P
7,191
7,745
7,180
6,509
Dealer Landed Price
R= M to 0
405,928
455,467
493,897
553,620
377,701
419,314
251,309
281,170

3. The DGAP has further stated that the aforementioned supporting invoices show that there was an increase in the rate of tax on the products namely, `Wagon R VX1 AMT’, ‘Swift VXI’, ‘Alto 800 LXI’ &Wagon R VXI’ (HSN code- 8703) from 15.63% in the pre-GST era to 29% in the post-GST era. The DGAP also stated that as per the Section 171(1) of the CGST Act, 2017 the anti-profiteering provisions are attracted only when there is a reduction in the rate of tax or increase in the input tax credit and therefore in the present case as there has been no reduction in the rate of tax, the allegation of profiteering by the Respondent was not established. The DGAP further observed that the selling price of the Respondent to his dealer had increased primarily because of the incidence of rate of tax had gone up from 15.63% to 29% as the afore mentioned transactions were in inter-state sale (Sale from Haryana State to Kerala State) where 1% CST was charged in pre-GST period whereas in post-GST 29% tax was charged. Therefore, the cum-tax price had increased.

4. The DGAP also stated from the above Table-B that the Respondent had changed the net base price (after discount) and charged effective rate of tax post implementation of GST and details of such change are furnished in the Table-`C’ given below:-

Table-C

Motor Car
model
Pre-GST net base price (in
Rs.)
Post-GST net base price (in
Rs.)
Increase/ (Decrease) post-
GST (in Rs.)
Increase/ (Decrease) post-GST (In
A B C D= (C-B) E=D/B
Wagon R AMT 3,28,023 3,28,213 190 0.06%
Swift VXI (0) 4,02,377 4,02,587 210 0.05%
Wagon R VXI 3,03,681 3,00,228 (3,453) (1.14%)
Alto 800 LXI 1,96,728 1,95,641 (1,087) (0.56%)

5. The DGAP further observed that the Respondent had reduced the base price by Rs. 3453/- in respect of Wagon R VXI and by Rs. 1087/- in Q respect of Alto 800 LXI. However, there was an increase in the net base price in the cases of models Wagon R AMT & Swift VXI (0) which was very negligible and it was also observed from Table-‘B’ given above that even this negligible increase was on account of reduction in discount while the base prices excluding discounts had remained same.

6. The above Report was considered by the Authority in it’s meeting held on 16.10.2018 and it was decided that as there was no private applicant, the Kerala Screening Committee should be asked to appear before the Authority and accordingly on 30.10.2018. Smt. Shainamol, Additional Commissioner, SGST, Kerala appeared on behalf of the Applicant No. 1. During the hearing she agreed to the Report submitted by the DGAP.

7. We have carefully considered the DGAP’s Report and the documents placed on record to examine whether there was any reduction in the rate of tax during the implementation of the GST and whether the benefit of reduction in the rate of tax was passed on or not to the recipient as provided under Section 171 of the CGST Act, 2017. First of all it is observed that the rate of tax was 15.63% in the pre-GST era which was increased to 29% in the post-GST era, as could be seen from the tabulation shown in Table-B above. Secondly from the invoices referred above, it is evident that before discount base prices of all the products had remained the same. These facts have also not been disputed by the representative of the Applicant No.1. Hence the provisions of Section 171 of the CGST Act 2017 are not attracted.

8. Based on the above facts it is clear that the Respondent has not contravened the provisions of Section 171 of the CGST Act, 2017 and hence there is no merit in the application filed by the above Applicant and the same is accordingly dismissed.

9. A copy of this order be sent to both the Applicants and the Respondent free of cost. File of the case be consigned after completion.

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