Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 23-5-2018 Last Replied Date:- 18-6-2018 – The GST law contains a provision on anti-profiteering measure as a deterrent for trade and industry to enjoy unjust enrichment in terms of profit arising out of implementation of Goods and Services Tax in India, i.e., anti-profiteering measure would obligate the businesses to pass on the cost benefit arising out of GST implementation to their customers. Section 171 provides that it is mandatory to pass on the benefit due to reduction in rate of tax or from input tax credit to the consumer by way of commensurate reduction in prices. As per rule 127, Anti Profiteering Authority (APA) shall be duty bound to: determine whether any reduction in rate of tax on any supply of goods or services or the benefit of the input tax credit has been passed on to the recipient by way of commensurate reduction in prices. identify the registered person who has not passed on the benefit of redu
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Vrandavaneshwree Automotive Pvt Ltd (Respondent), a Bareilly-based Honda car dealer, by concluding that it did not contravene the anti-profiteering provisions of the Central GST Act, 2017. The order states that the Honda car dealer had passed on the benefit of the reduction in tax rate after GST to the applicant by way of reduction in the price of the car by ₹ 10,550. We find that the respondent (Honda car dealer) has given details of all the basic components of the price of the car purchased by the applicant … and benefit of ₹ 10,550 on account of reduction of tax by about 2 per cent viz. from 31.254 percent (pre GST) to 29 percent (post GST) has already been passed on to the applicant and the amount of ₹ 10,550 is inclusive of the ITC (input tax credit) … therefore, no additional benefit on account of ITC is required to be paid by the respondent . It was thus held that the respondent (Honda car dealer) has not contravened the provisions of Section 171 of the CG
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as imposed on branded packed rice resulting in availability of input tax credit. It was reported that the India Gate brand was not registered brand and the product become taxable @ 5% only from 22.09.2017 vide Notification No. 28/2017-CT (Rate) dated 22.09.2017. It was observed that the rice manufacturer was able to take input tax credit ranging from 2.69% to 3% during September – November, 2017. It was contended that the GST rate on outward supply of their product was 5% and the ITC available to discharge the GST liability was not sufficient and the balance amount of GST was paid by the Respondent in cash therefore, there was no benefit of ITC which could be passed on to the consumers. Further, the prices of 'rice' being an agricultural product, changed frequently because of the market forces and the other cost factors and were not solely dependent on the tax rates. It also contended that the price of paddy had increased by more than 30% in the year 2017 as compared to the yea
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at the ITC available to then as a percentage of the total value of taxable supplies was between 2.69% to 3% whereas the GST on the outward supply of his product was 5% which was not sufficient to discharge its tax liability. Moreover, in this case the rate of tax has been increased from 0% to 5% instead of reduction in the same. Therefore, there was no reason for treating the price fixed by the Respondent as violation of the provisions of the Anti-Profiteering clause. Also, there was an increase in the purchase price of paddy in the year 2017 as compared to its price during the year 2016 which constitutes major part of the cost of the above product. It is further revealed from the record that the Respondent had increased the MRP of his product from ₹ 540/- to ₹ 585/- which constituted increase of 8.33% keeping in view the increase in the purchase price. Therefore, due to the imposition of the GST on the above product as well as the increase in the purchase price of the padd
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