2018 (4) TMI 1377 – THE NATIONAL ANTI-PROFITEERING AUTHORITY – 2018 (13) G. S. T. L. 415 (N. A. P. A.) – Profiteering – Reduction on rate of tax post GST – Honda Car having Model No. WR-V 1.2 VX MT (i-VTEC) – whether the rate of tax on the car had been reduced post-GST and if so, whether there was substantial reduction in the rate of tax as had been contended by the applicant and whether the benefit of reduction in rate of tax had been passed on to the applicant? – Held that: – Section 171(1) of the Central Goods and Service Tax, 2017 requiring that “any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on the recipient by way of commensurate reduction in prices” has not been contravened in the present case.
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The rate of tax both during pre-GST era as well as the post GST era was a matter of fact which has been clearly delineated in detail by the DGSG in his report dated 23.02 2018. It has also been found that the appli
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the ITC as has been calculated in Table 'B' – no additional benefit on account of ITC is required to be paid by the respondent.
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The respondent has not contravened the provisions of Section 171 of the CGST Act, 2017 – application dismissed. – 1/2018 Dated:- 27-3-2018 – Sh. B. N. Sharma, Chairman, Sh. J. C, Chauhan, Technical Member, Sh, Bijay Kumar, Technical Member and Ms R Bhagyadevi, Technical Member ORDER The present report has been received from the Director General of Safeguards (DGSG) after detailed investigation under Rule 129 (6) of the Central Goods & Services Tax (CGST) Rules, 2017. The brief facts of this case are that an application dated 01-11-2017 (Annexure-1) was filed by the above applicant before the Standing Committee, constituted under Rule 123 (1) of the above Rules in which he had stated that he had entered in to a contract vide Annexure-3, on 28-04-2017 for supply of a Honda Car having Model No. WR-V 1.2 VX MT (i-VTEC) through the above respondent, wh
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eeting held on 07-11-2017 (Annexure-2) and referred to the DGSG for detailed investigation under rule 129 (1) of the CGST Rules, 2017, which was received by the DGSG on 29-11-2017, The DCSG had issued notice to the above respondent on 15-12-2017 (Annexure-5) to furnish reply and also supply copies of the documents mentioned in the notice. The respondent had submitted his reply and required documents vide his letters dated 26-12-2017 (Annexure-7) and 28-01-2018 (Annexure – 8). The DGSG had also given opportunity to the applicant to inspect the reply and documents submitted by the respondent vide his letter dated 30-01-2018 and after inspecting the same the applicant vide his letter dated 16-02-2018 (Annexure-6) had intimated that he was satisfied with the reply given by the respondent and therefore the case may be closed. 3. The respondent, in his replies dated 26.12.2017 and 28 01.2018 had stated that he was registered under the GST and was engaged in trading and servicing of the cars
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colour Car was ₹ 9,09,300/- at that time. Her had also intimated that after GST had been imposed w.e.f. 01.07.2017, the price list was revised and the ex-showroom price of the Alabaster Silver colour car was fixed as ₹ 8,98,749/- which was charged from the applicant. 5. The respondent had also submitted copies of the following documents with his replies:- (a) Audited Balance Sheet & Profit & Loss account for the FY 2016-17 (b) Copies of purchase invoices from April to September, 2017. (c) Copies of retail invoices from April to September, 2017. (d) Copies of returns filed with the Commercial Taxes Department from April to June, 2017. (e) Price Lists (pre-GST & post-GST). (f) Copies of Service Tax returns from April to September, 2017 6. The DGSG had investigated whether the rate of tax on the car had been reduced post-GST and if so, whether there was substantial reduction in the rate of tax as had been contended by the applicant and whether the benefit of reduc
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rice list wherein two types of dealer's margins were shown, the first was of an amount of ₹ 26,619/- and the second was of an amount of ₹ 7,000/- shown as dealer's margin The DGSG had concluded that the total dealer's margin appeared to be ₹ 33,619/- and not ₹ 25,826/-, as claimed by the respondent. 8. The DGSG had further found that the contention of the applicant that the total incidence of tax on the car was reduced from 51% to 29% post-GST, was also not correct as there was a minor reduction in the tax rate in the post-GST period and the tax rate had remained more or less the same. He had also calculated the comparative rates of pre-GST and post-GST tax on the model of car purchased by the applicant which are given in Table 'A' below:- Table A Duty/Tax/Cess Pre-GST Rate (%) Post-GST Rate (%) Excise Duty (S. No. 285 of Notification No. 12/2012 dt. 17.03.2012 as amended 12.5 – National Calamity Contingent Duty (NCCD) 1 – Auto Cess 0.125 – I
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4,000 Ex-showroom price of Orchid white colour car Q=O+P 9,13,300 Price charged from the applicant 8,98,750 Benefit passed on to the applicant (excluding ₹ 4,000/- reduced for change in colour) 10,550 10. The DGSG had also found that the allegation of the applicant that the total tax prior to the implementation of GST was 51% which was reduced to 29% w.e.f. 01.07.2017, was not correct. He had further found that claim of the applicant that though the price charged from him of ₹ 8,98,750/- was less than the contractual price of ₹ 9,13,300/- still the said reduction was not commensurate with the reduction in the rate of tax was also not correct. It was also revealed that while the total incidence of tax was approximately 31.254% previously, which was fixed as 29% w.e.f. 01 07.2017, thus there was reduction of just over 2%. 11. The DGSG had also concluded that although the car of premium colour was booked at an amount of ₹ 9,13,300/- at the pre-GST tax rate, the de
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ty in its meeting held on 01.03.2018 and it was decided to accord personal hearing to the applicant on 16.03.2018 at 11 AM Accordingly vide notice dated 01.03.2018, the applicant was informed but he did not appear but submitted his replies vide emails dated 15.03.2018 and dated 16.03.2018. The applicant vide his letter dated 16.03.2018, received through email around 4 PM had informed that he could not attend the proceedings before the Authority due to health problems, He vide his letter dated 15.03.2018 has also submitted as under:- "At page no.:05 of subject order sheet under clause no.: 16 it is mentioned as per hereunder:- In view of the abovementioned findings the conclusion is that Section 171(1) of the Central Goods and Service Tax, 2017 requiring that "any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on the recipient by way of commensurate reduction in prices" has not been contravened in the present
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cant by the respondent. 15. With regard to point no. (i) above It has been found from the record that the rate of tax both during pre-GST era as well as the post GST era was a matter of fact which has been clearly delineated in detail by the DGSG in his report dated 23.02 2018 as has been mentioned above. It has also been found that the applicant's contention that the pre-GST rate of tax which was 51% was reduced to 29% in post GST era, was factually incorrect as the pre-GST rate of tax, on the car contracted to be purchased by the applicant, was leviable at 31.254% which was rationalized to 29% (CGST-14%+SGST-14%+Cess-1%)thus there was a reduction of only about 2%. It is also clear from the Table 'B' above that though the car of premium colour was booked at an amount of ₹ 9,13,000/- at pre-GST tax rate but when the applicant took delivery of the 'base colour' car on 11.7.2017 in the post GST period, the respondent had charged the applicant an ex-showroom pric
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contravened to the recipient in his case and he had requested to highlight the exact amount of ITC to be contravened to him, 17. We have carefully considered the submissions made by the applicant in his letter dated 15.3.2018 and we are of the view that the applicant has not understood the provisions of Section 171 of the CGST Act, 2017 and the DGSG's report in its true spirit and context. The entire scheme of GST is ITC based i.e. the recipient of the goods and services takes credit of GST paid by him on purchase of goods and services and uses such ITC while discharging GST output tax liability on supply of goods and services. We also find that the respondent has given details of all the basic components of the price of the car purchased by the applicant as has been mentioned in Table 'B' above and benefit of ₹ 10,550/- on account of reduction of tax by about 2% viz. from 31.254% (pre GST) to 29% (post GST), as discussed above, has already been passed on to the appl
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