Case Law Details
Joydeep Sarkar Vs Himalaya Drug Company (NAA)
Fact of the Case:
The brief facts of the case are that under Rule 128 (1) of the Central Goods and Services Tax (CGST) Rules, 2017 an application dated 27.11.2017 was filed before the Standing Committee on Anti-profiteering by the Applicant No. 1 alleging that the Respondent had not passed on the benefit of reduction in the GST rate w.e.f. 15.11.2017 to his customers but had instead increased the base prices of his products by keeping the Maximum Retail Prices (MRP) unchanged. The above Applicant had also submitted Price Lists of a large number of the products supplied by the Respondent showing both the pre and post GST rate reduction prices claiming that the Respondent had not reduced the MRPs.
Held by NAA:
It is clear from the above narration of the facts that the profiteered amount has been computed by comparing the average pre rate reduction base prices of the impacted products with the average post rate reduction base prices in respect of both the tax reductions. The above mathematical methodology adopted by the DGAP to compute the profiteered amount is not in consonance with the methodology approved by this Authority in the cases of tax reductions decided by it as the profiteered amount has been determined by comparing the average pre rate reduction base prices with the actual post rate reduction prices. It would also be pertinent to mention here that the DGAP has also been comparing the average pre rate reduction base prices with the actual post rate reduction prices in the cases where rate of tax has been reduced to compute the profiteered amount. In case the mathematical methodology of comparing the average to average base prices employed by the DGAP is approved it would not be possible to compute the benefit of tax reduction which is due to each customer on each supply. The profiteered amount computed by the DGAP would also not be correct. Hence, the above mathematical methodology adopted by the DGAP is not correct, logical, appropriate and in consonance with the provisions of Section 171 of the CGST Act, 2017. Therefore, the Report dated 22.10.2019 furnished by the DGAP cannot be accepted. Accordingly, the DGAP is directed to reinvestigate the above case under Rule 133 (4) of the CGST Rules, 2017.
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