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HUL held guilty of profiteering for not passing on benefit of reduced GST rates to consumer

Shanti Prime Publication Pvt. Ltd. Anti-Profiteering — Section 171 of the CGST Act, 2017— The Applicant complained that although the GST had been reduced from 28% to 18% on a large number of products w.e.f. 15.11.2017, the Respondent had not reduced the MRPs of the products which were being sold by him. The Applicant also alleged that the Respondent had increased the base prices of his products, so that the MRPs continued to be the same even after reduction in the rates of GST. These applications were examined by the Standing Committee on Anti-profiteering and it was decided to refer the matter to the DGAP to investigate both the above applications to determine whether the benefit of reduction in the GST rates had been passed on by the Respondent to the customers or not. The DGAP after detailed investigation has submitted his Report. The DGAP’s report states that the GST rates have been decreased from 28% to 18% and from 18% to 12% with effect from 15.11.2017. The Report also states that the Respondent had suo moto, even before the issue of notice had admitted that he could not pass on the benefit of reduction in the tax rates to the consumers and therefore it was established that the Respondent had failed to pass on the benefit of the reduction in the rates of tax to his consumers in terms of the Section 171 of the CGST Act, 2017.

Held that:- The Hon’ble Anti-Profiteering Authority held that the Respondent has resorted to profiteering. Since the Respondent has been held guilty of profiteering and has been found to have violated the provisions of Section 122 (1) (i) of the Act, 2017, a fresh notice be issued to him asking him to explain why penalty should not be imposed on him.

nkit Kumar Bajoria, Sh. Subramanian Manjeri Ramanathan, Director General Anti-Profiteering, Central Board of Indirect Taxes & Customs Vs. Hindustan Unilever Limited [2018] 7 TAXLOK.COM 051 (NAPA)