Shri Anil Sharma Vs Printing Machine Solutions (National Anti-Profiteering Authority)
This Report dated 25.10.2019 has been received from the Applicant No. 2 i.e. the Director General of Anti-Profiteering (DGAP), under Rule 129 (6) of the Central Goods & Services Tax (CGST) Rules, 2017. The brief facts of the present case are that an application dated 29.09.2017 was filed before the Standing Committee on Anti-profiteering, by the Applicant No. 1, alleging profiteering in respect of the supply of a “Used Heidelberg Speed Master Offset Press with complete tools and accessories (Model SM 74-5+LX, Year of manufacture 1997)” by the Respondent.
The DGAP also submitted that the Applicant had purchased an imported “Used Heidelberg Offset Press SM 74-5 +LX, Year 1997 with complete tools and accessories” from the Respondent for which the Respondent had quoted price of Rs. 1,40,00,000/- (plus local Sales Tax, if applicable) as per the proforma Invoice No. Press/DA/PMS/060517 dated 06.05.2017. He was, however, billed for an amount of Rs. 1,65,20,0001- as per tax invoice No. 01 dated 29.07.2017, which included GST @ 18% on Rs. 1,40,00,000/-. The above Applicant also alleged that after the implementation of the GST, various existing taxes like VAT, CST, CVD, SAD etc. had been subsumed in the GST but the Respondent charged 18% GST on Rs. 1,40,00,000/- which was the quoted price inclusive of erstwhile taxes like CVD and SPL CVD etc. and did not pass on the benefit of ITC to him by way of commensurate reduction in price in terms of Section 171 of the CGST Act, 2017.
The DGAP Submitted that the aforesaid application was examined by the Standing Committee in its meeting held on 04.2019, the minutes of which were received in the office of the DGAP on 02.05.2019, whereby it was decided to refer the same, to conduct a detailed investigation in the matter, in terms of Rule 129 of the Rules.
The DGAP further submitted that on receipt of the aforesaid reference from the Standing Committee on Anti-profiteering on 02.05.2019, a Notice under Rule 129(3) of the Rules was issued by the him on 16.05.2019, calling upon the Respondent to submit his reply as to whether he admitted that the benefit of input tax credit, had not been passed on to his recipients by way of commensurate reduction in price and if so, to suo-moto determine the quantum thereof and indicate the same in his reply to the Notice as well as furnish all documents in support of his reply. Further, vide the said Notice, the Respondent was also allowed to inspect the non-confidential evidences/ information which formed the basis of the said Notice, during the period 22.05.2019 to 24.05.2019 which the Respondent did not avail of. The Applicant No. 1 was also offered an opportunity to inspect the non-confidential evidences/ documents submitted by the Respondent on either on 22.10.2018 or 23.10.2019 which the Applicant availed on 23.10.2018. The period covered by the current investigation was from 01.07.2017 to 30.04.2019.
Held by NAA
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/ additional ITC to the Applicant No. 1 by commensurate reduction in the price. Accordingly, the amount of profiteering is determined as Rs. 6,91,121/- as per the provisions of Rule 133 (1) of the CGST Rules, 2017.
Accordingly, the Respondent liability to refund the profiteered amount of Rs. 6,91,121/-, along with the interest to be calculated at 18% from the date when the above amount was collected by him from the recipients till the above amount is deposited/refunded, is established. Further, since the Respondent has already refunded the profiteered amount of 6,91,121/- to Applicant No. 1 through RTGS dated 12.12.2019 and since the receipt thereof has also been acknowledged by the Applicant No. 1, vide submissions of Applicant No. 1 dated 10.01.2020, we direct the Respondent to pay the interest to be calculated @ 18% from the date when the profiteered amount was collected by him from the Applicant No. 1 till the above amount is paid 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.
It is evident from the case records that the Respondent has denied the benefit of rate reductions/additional ITC in the GST to the Applicant No. 1 in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and he has thus profiteered as per the explanation attached to Section 171 of the above Act. Therefore, he is liable for imposition of penalty under Section 171 (3A) of the CGST Act, 2017. Therefore, a Show Cause Notice be issued to him directing him to explain why the penalty prescribed under the above sub-Section should not be imposed on him.
Further this Authority as per Rule 136 of the CGST Rules, 2017 directs the Commissioners of CGST/SGST Delhi to monitor this order under the supervision of the DGAP by ensuring that the interest amount as ordered by the Authority is passed on to the Applicant No. 1. A report in compliance of this order shall be submitted to this Authority by the concerned Commissioners within a period of 4 months from the date of receipt of this order.
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING AUTHORITY
1. This Report dated 25.10.2019 has been received from the Applicant No. 2 i.e. the Director General of Anti-Profiteering (DGAP), under Rule 129 (6) of the Central Goods & Services Tax (CGST) Rules, 2017. The brief facts of the present case are that an application dated 29.09.2017 was filed before the Standing Committee on Anti-profiteering, by the Applicant No. 1, alleging profiteering in respect of the supply of a “Used Heidelberg Speed Master Offset Press with complete tools and accessories (Model SM 74-5+LX, Year of manufacture 1997)” by the Respondent.
2. The DGAP also submitted that the Applicant had purchased an imported “Used Heidelberg Offset Press SM 74-5 +LX, Year 1997 with complete tools and accessories” from the Respondent for which the Respondent had quoted price of Rs. 1,40,00,000/- (plus local Sales Tax, if applicable) as per the proforma Invoice No. Press/DA/PMS/060517 dated 06.05.2017. He was, however, billed for an amount of Rs. 1,65,20,0001- as per tax invoice No. 01 dated 29.07.2017, which included GST @ 18% on Rs. 1,40,00,000/-. The above Applicant also alleged that after the implementation of the GST, various existing taxes like VAT, CST, CVD, SAD etc. had been subsumed in the GST but the Respondent charged 18% GST on Rs. 1,40,00,000/- which was the quoted price inclusive of erstwhile taxes like CVD and SPL CVD etc. and did not pass on the benefit of ITC to him by way of commensurate reduction in price in terms of Section 171 of the CGST Act, 2017.
3. The DGAP Submitted that the aforesaid application was examined by the Standing Committee in its meeting held on 04.2019, the minutes of which were received in the office of the DGAP on 02.05.2019, whereby it was decided to refer the same, to conduct a detailed investigation in the matter, in terms of Rule 129 of the Rules.
4. The DGAP further submitted that on receipt of the aforesaid reference from the Standing Committee on Anti-profiteering on 02.05.2019, a Notice under Rule 129(3) of the Rules was issued by the him on 16.05.2019, calling upon the Respondent to submit his reply as to whether he admitted that the benefit of input tax credit, had not been passed on to his recipients by way of commensurate reduction in price and if so, to suo-moto determine the quantum thereof and indicate the same in his reply to the Notice as well as furnish all documents in support of his reply. Further, vide the said Notice, the Respondent was also allowed to inspect the non-confidential evidences/ information which formed the basis of the said Notice, during the period 22.05.2019 to 24.05.2019 which the Respondent did not avail of. The Applicant No. 1 was also offered an opportunity to inspect the non-confidential evidences/ documents submitted by the Respondent on either on 22.10.2018 or 23.10.2019 which the Applicant availed on 23.10.2018. The period covered by the current investigation was from 01.07.2017 to 30.04.2019.
5. The DGAP also stated that the time limit to complete the investigation had been extended upto 01.11.2019 in terms of Rule 129 (6) of the Rules.
6. The DGAP intimated that the Respondent submitted his replies to the said Notice vide letters dated 17.06.2019, 06.2019, 10.10.2019, 11.10.2019 and 14.10.2019. Vide the aforementioned letters/e-mails, the Respondent submitted the following documents/information:-
a) GSTR-1 Returns for the period July 2017 to April 2019.
b) VAT Returns for the period April 2017 to June 2017.
c) Import documents such as Bill of Entry and Invoices in respect of the Printing Machine supplied.
7. The DGAP further intimated that the Respondent had requested to treat all the data/information furnished by him as confidential, in terms of Rule 130 of the Rules.
8. The DGAP further claimed that the Central Government had implemented GST w.e.f 01.07.2017 which subsumed various taxes levied by the Central Government and State Governments, which are as follows: –
