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Respondent has denied the benefit of tax reduction to the customers in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and he has thus resorted to profiteering.

Anti-Profiteering — Section 171 of the CGST Act, 2017— The applicant alleged profiteering in respect of restaurant service supplied by the Respondent (Franchisee of M/s Subway Systems India Pvt Ltd.). It was alleged that despite reduction in the rate of GST from 18% to 5% w.e.f. 15.11.2017, the Respondent had not passed on the commensurate benefit of tax reduction as he had increased the base prices of his products. The DGAP submitted that the allegation of profiteering by way of either increasing the base prices of the products while maintaining the same selling prices or by way of not reducing the selling prices of the products commensurately, despite the reduction in the rate of GST from 18% to 5% w.e.f. 15.11.2017 stood confirmed against the Respondent and the extent of profiteering was Rs.7,53,854/- (inclusive of GST). Thus the provisions of Section 171 (1) of the Act had been contravened by the Respondent.
Held that:- The Hon’ble Anti-Profiteering Authority directed the Respondent to reduce the prices commensurate as per the provisions of Rule 133 (3) (a). Further held that the Respondent has denied the benefit of tax reduction to the customers in contravention of the provisions of Section 171 (1) of the Act, 2017 and has resorted to profiteering. Hence, committed an offence under Section 171 (3A) of the Act and liable to penal action.—Director General of Anti-Profiteering, Central Board of Indirect Taxes & Customs Vs. Gaurav Sharma Food Industries [2020] 26 TAXLOK.COM 033 (NAPA)

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