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It is clear that the Respondent has indulged in profiteering in violation of the provisions of Section 171 of the CGST Act, 2017 and has not passed on the benefit of reduction of tax as per the Notification 41/2017-Central Tax (Rate) dated 14.11.2017 in respect of the above products to his customers and therefore, he is liable for penalty under Rule 133(3)(d) of the CGST Rules, 2017,

Shanti Prime Publication Pvt. Ltd.
Anti-Profiteering — Section 171 of the CGST Act, 2017— Anti- Profiteering – The report received from the DGAP after detailed investigation. The application was filed by the Applicant before the Standing Committee, alleging that the Respondent did not pass on the benefit of reduction in the GST rate applicable to detergents from 28% to 18% w.e.f. 15.1 1.2017 but increased the base prices of the detergents sold by him, so that there was no reduction in the prices to the recipients. The Applicant submitted copies of two sale invoices of Fortune ADW Detergent 1 Kg. and Fortune Rinse Aid 500 ml. issued by the Respondent. The Standing Committee on Anti-Profiteering, forwarded the same to the DGAP for detailed investigation. The DGAP submitted that the Respondent instead of reducing the base prices sold 20,315 units of Fortune ADW Detergent 1 Kg. and 11,214 Units of Fortune Rinse Aid 500 ml. at the increased base prices across various States. Thus, by increasing the base prices of the said products consequent to the reduction in the GST rate, the benefit of reduction in the GST rate from 28% to 18% was not passed on to the recipients. Respondent submitted that he was a SSI unit manufacturing detergents and was availing benefit of SSI units granted under the Central Excise Act, 1944 and therefore, he was selling his products after charging VAT @ 12.5% on the base prices and w.e.f. the introduction of the GST from 1st July 2017 his products were levied GST @ 28% which had caused confusion and disturbed his pricing pattern.
Held that:- The Hon’ble Anti-Profiteering Authority held that the Respondent has committed an offence under section 122 (1) (i) of the above Act and hence, he is liable for imposition of penalty. Although, the Notice for imposition of penalty has already been issued to him on 11.09.2018, keeping in view, the principles of natural justice it would be appropriate to issue him fresh notice asking him to explain why penalty should not be imposed on him.Shri Surya Prakash Loonker, And Director General Anti-Profiteering, Central Board of Indirect Taxes & Customs Vs. Excel Rasayan Pvt. Ltd. [2019] 8 TAXLOK.COM 015 (NAPA)