Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 6-8-2018 – As per GST law in India, the GST law contains a unique 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. Anti-profiteering Clause 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. Anti profiteering measures will help check price rise and also put a legal obligation on businesses to pass on the benefit. This will also help in instilling confidence in citizens. It may be noted that the anti-profiteering measure in GST law is meant to be a deterrent and is an enabling clause so that reduction in tax incid
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i-profiteering Authority (NAA) ordered that there was no anti-profiteering established and the complaints was not maintainable and was therefore, dismissed. According to the factual matrix, the applicant had ordered a Godrej Interio Slimline Metal Almirah through Flipkart on 4th November. 2017 and a tax invoice dated 07.11.2017 for ₹ 14852/- was issued by the supplier, M/s Godrej & Boyce Mfg Co. Ltd., Mumbai. However, at the time of delivery, another invoice dated 29.11.2017 was issued by the Supplier for an amount of ₹ 14,152/-. The Applicant had alleged that he had paid an amount of ₹ 14,852/- to the Flipkart and the excess amount charged should have been refunded to him. It was also alleged that non-refund of differential amount was resorting to profiteering in contravention of provisions of section 171 of the CGST Act, 2017. This was investigated by Standing Committee and then referred to Director General of Safeguards (DGSG) which has now been renamed as Dire
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ier base price after coming in to force of the GST. The discount of Rs. 500/- which was offered earlier had been withdrawn by the Supplier vide his invoice dated 29.11.2017 which did not amount to profiteering. Also, the excess amount of GST paid by the Applicant @ 28% at the time of placing order was to be refunded by the Respondent as the same had been reduced to 18% at the time of delivery on 29.11.2017. It was recommended that there had been no profiteering by the Supplier and hence there was no violation of the provisions of the CGST Act, 2017. On the other hand, respondent (Flipkart) submitted that the excess amount of tax collected by him. The DGAP vide his letter dated 11.05.2018 had informed that as per the letter dated 27.4.2018 received from the Respondent the excess amount of Rs. 700/-collected from the Applicant had been refunded on 18.01.2018. Further, it was only offering a market place which enabled the sellers to offer their products for direct sale to the customers fo
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unt of Rs. 500/- was offered. It is also revealed that the Almirah was supplied to the Applicant by the Supplier vide invoice dated 29.11.2017 in which the base price was again shown as Rs. 11,993.87/- and GST of Rs. 2158/- was charged @ 18%, as the same had been reduced by the Government of India on 14.11.2017 from 28% to 18%. Therefore, it is clear that the Supplier had charged correct rates of GST which were prevalent at the time of placing of the order and the supply of the Almirah through the above two invoices, therefore, no illegality had been done by the Supplier while executing the order placed by the Applicant. It is also apparent from the record that the Supplier had not changed the base price of Rs. 11,993.75/- which was prevalent at the time of booking on 4.11.2018, at the time of delivery on 29.11.2017. Hence the Supplier has not resorted to profiteering by increasing his base price or appropriated the excess amount of tax charged from the Applicant and hence the allegati
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after reduction of rate to 18%, NAA directed the Flipkart to ensure that different refund of excess tax is made to buyers without any delay. In larger public interest and based on market practices, anticipating that there could be more such cases, NAA also directed the Director General of Audit, Central Board of Indirect Taxes and Customs vide letter No. NAA/2018/DO/08/211 dated 24.5.2018 to audit the major e-platforms and submit its findings to the Authority. End Note Going by the performance of NAA, it is clear that its very objective seem to have been defeated, firstly due to its late set up and secondly, its reactive approach by which it could only deal with just half a dozen of complaints. It is yet to take suo moto action on malpractices prevalent in the market place. NAA is yet to book a case against any supplier. Also, there are various vague areas such as arbitrariness in deciding on goods for price change stickers (why only FMCG), passing of commensurate benefits which is hi
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