Sh. Pushpak Chauhan Vs M/s Harish Bakers & Confectioners Pvt. Ltd. (National Anti-Profiteering Authority)
1. The present Report dated 18.06.2018 has been received from the Director General of Safeguards, now Director General of Anti-Profiteering (here-in-after referred to as the DGAP) after detailed investigation under Rule 129 (6) of the Central Goods & Services Tax (CGST) Rules, 2017. The brief facts of the case are that vide his application dated 29.11.2017 the Applicant No. 1 had complained to the Standing Committee, constituted under Rule 123 (1) of the above Rules alleging that although the GST rate applicable on the Chocolates had been reduced from 28% to 18% w.e.f. 15.11.2017, the Respondent had not reduced the prices of 2 products viz. the Nestle Munch Nuts 32 Gm. Chocolate and the Cadbury Dairy Milk Chocolate (here-in-after referred to as the products) and had thus not passed on the benefit of such rate reduction to him. He had also submitted the pre rate reduction invoice No. 299238 dated 10.11.2017 and the post rate reduction invoice No. 311392 dated 16.11.2017 which showed that both the above products were sold by the Respondent @ Rs. 20/- per piece and Rs. 40/- per piece respectively before and after the rate of tax was reduced on them. Thus it had been alleged by the above Applicant that the Respondent had indulged in profiteering in contravention of Section 171 of CGST Act, 2017 and action should be taken against him. The above application was examined by the Standing Committee on Anti-Profiteering and was referred to the DGAP, vide minutes of it’s meeting dated 20.12.2017 for detailed investigations under Rule 129 (1) of the CGST Rules, 2017.
2. The DGAP had called upon the Respondent to submit his reply on the above allegation and also asked him to suo moto determine the quantum of benefit which had not been passed on by the Respondent after the GST rate reduction for the period w.e.f. 15.11.2017 to 31.03.2018. The Respondent had submitted replies vide his letters dated 12.02.2018, 27.02.2018, 21.03.2018, 16.04.2018, 24.04.2018 and 02.05.2018 and admitted that he had sold the above products to the applicant vide invoices dated 10.11.2017 and 16.11.2017 after charging the tax at the prevalent rates of 28% and 18% on the base prices and he had not made any additional profit after the reduction in the GST rate. He had also replied that since their base prices had been increased by their Distributors he had increased the base prices keeping his profit margin same @ 11.5% and 12% respectively and sold the above products at the original Maximum Retail Prices (MRPs) as there was no change in the MRPs. He had further informed that the price of Nestle Munch 32 Gm. Chocolate being charged from him before 15.11.2017 was Rs. 14.01 per piece which was increased to Rs. 15.20 per piece by it’s Distributor after 15.11.2017 and it was sold by him at the base price of Rs. 16.95 per piece keeping the same profit margin of 11.50%. He had also submitted that the price of Cadbury Dairy Milk Chocolate was Rs. 27.90 per piece before 15.11.2017 which was enhanced to Rs. 30.27 per piece by it’s Distributor after 15.11.2017, which was sold at Rs. 33.90 per piece by him after maintaining the same profit margin of 12%, which has been shown in the tables given below:-
