Section 171 of the CGST Act, 2017— Anti- Profiteering – The reference was made to the DGAP intimating that certain major manufacturers of Fast Moving Consumer Goods (FMCG) have not passed on the benefit of reduction in the GST rate from 28% to 18% w.e.f. 15.11.2017, by maintaining the prices of their products at the pre-GST rate reduction levels. The invoices issued by the Respondent for supply of Beauty Cream 50 GM were sent to the DGAP. The Respondent submitted to the DGAP that he was getting commission on the purchases he made from the manufacturer and was also getting a discount of approx. 33% when the rate of tax was 28%, which was reduced to approx. 22% when the rate of tax had come down to 18%. The DGAP after completing the investigation submitted that the Respondent was legally bound to pass on the benefit of reduction in the GST rate to his customers which he had not done as was apparent from the invoices dated 12.11.2017 and 29.11.2017. Further, the base price of the product was increased by the Respondent after the rate of tax was reduced from 28% to 18% w.e.f. 15.11.2017.
Held that:- The Hon’ble Anti-Profiteering Authority directed to the Respondent to reduce the sale prices of all the products the base prices of which he has increased w.e.f. 15.11.2017 immediately and pass on the benefit to his customers. The authority held that the allegation of profiteering has been duly established against him. Accordingly, he has committed offence under Section 122 (1) (i) of the Act, 2017. Therefore, notice be issued asking him to explain why penalty should not be imposed on him. Director General Anti-Profiteering vs. Satya Enterprises.[2019] 8 TAXLOK.COM 039 (NAPA)