Shanti Prime Publication Pvt. Ltd.
Anti-Profiteering — benefit of reduction in the rate of tax—Rule 129(1) of CGST Rules, 2017—In the instant case, application is filed by applicant alleging that the Respondent had not passed on the benefit of reduction in the rate of tax by lowering the price of Vaseline VTM 400 ml, which he had purchased from the respondent, when the Goods and Services Tax (GST) was reduced from 28% to 18% on this product on 15.11.2017.
Held that— Respondent has himself admitted through the Table submitted by him vide his submissions dated 23.4.2018 that prior to the reduction in the GST on the product from 28% to 18% w.e.f. 15.11.2017 it was being purchased by the Respondent at the base price of 158.66/- per unit with GST of 44.42/- @ 28% and the total purchase price was 203.08/ per unit and it was being sold by him on the price of 213.63/per unit after adding his margin @ 4.06% of 10.55/-. He had 1288 units of the product in stock on 14.11.2017. He has also admitted that after 15.11.2017 he had sold the product at the base price of 172.77/- after levying GST of 31.10/- @ 18% and charging margin of 9.77/- per unit and the product was sold by him at the price of 213.64/.
Therefore, it is clear that there was no reduction in the sale price charged by him although the rate of GST was cut by 10%, rather the base price was increased by 14.11/- per unit by the Respondent.
It is clear from the narration of the facts stated above 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 dated 14.11.2017 supra in respect of the above product to his customers and therefore, he is liable for action under Rule 133 of the CGST Rules, 2017 - the Respondent is directed to reduce the sale price of the product immediately commensurate to the reduction in the rate of tax as was notified on 14.11.2017 and pass on the benefit of reduction in the rate of the tax to his customers.
It is clear from the facts of the present case that the Respondent was fully aware of the Notification dated 14.11.2017 whereby the rate of GST was reduced on the above product from 28% to 18%. He was also fully aware of the provisions of Section 171 of the above Act whereby he was bound to pass on the benefit of reduction in the rate of tax by commensurate reduction in the price of the above product. However, the Respondent has deliberately acted in defiance of the above law and hence he is guilty of the conduct which is contumacious and dishonest - Accordingly, it is proposed to impose penalty on the Respondent under Section 122 of the CGST Act, 2017 read with Rule 133 (d) of the CGST Rules, 2017. However, before the penalty is imposed the Respondent is hereby given notice as to why such penalty should not be imposed on him.[SHRI PAWAN SHARMA C/O KALPTARU DEPARTMENTAL & GENERAL STORES, DIRECTOR GENERAL ANTI-PROFITEERING, INDIRECT TAXES & CUSTOMS VERSUS M/S SHARMA TRADING COMPANY] [THE NATIONAL ANTI-PROFITEERING AUTHORITY] 4 TAXLOK.COM 41 (NAPA)