2018 (12) TMI 1002 – THE NATIONAL ANTI-PROFITEERING AUTHORITY – 2019 (20) G. S. T. L. 379 (N. A. P. A.) – Profiteering – purchase of one Honda City Car – benefit of Input Tax Credit (ITC) was not passed on – benefit of reduction in the rate of tax – Section 171 of the CGST Act, 2017.
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Reduction in the tax rates – Held that:- It is clear from the DGAP's investigation report that there was no reduction in the tax rate in this case hence, the allegation of profiteering by the Respondent on account of change in tax rate is not sustainable.
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Benefit of ITC – Held that:- The record also reveals that the base price charged by the Respondent in the post-GST sale invoice dated 14.10.2017 was ₹ 1,73,346/- less than the base price in the preGST sale invoice dated 28.04.2017 due to the reason that in the preGST period, the credit of Excise Duty, NCCD and Cesses etc. was not available to the Respondent as only credit of VAT was admissible while in the post-GST period, the Responden
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application filed by the Applicant No. 1 requesting for action against the Respondent for violation of the provisions of the Section 171 (1) of the CGST Act, 2017 is not maintainable and hence the same is dismissed – application dismissed. – 18/2018 Dated:- 17-12-2018 – Sh. B. N. Sharma, Chairman, Sh. J. C. Chauhan, Technical Member And Ms. R. Bhagyadevi, Technical Member For the Applicant No. 1 : None For the Applicant No. 2 : Sh. Akshat Aggarwal, Assistant Commissioner ORDER 1. An application dated 12.08.2017 was filed before the Standing Committee on Anti-profiteering under Rule 128 of the Central Goods and Service Tax (CGST) Rules, 2017, by the Applicant No. 1 alleging that he had purchased one Honda City Car from the above Respondent vide Tax Invoice No. A-Tax/998/17-18 dated 14.10.2017 by paying an amount of ₹ 9,54,234/- on which GST @ 28% and Cess @ 17% was charged, however the benefit of Input Tax Credit (ITC) was not passed on to him by the above Respondent and therefo
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ome 'functus officio'. 3. On receipt of the reference from the Standing Committee on Anti-profiteering, the DGAP had re-examined the Application filed by the above Applicant and vide letter F.No. D-22011/APl/1 1/2018/736 dated 14.03.2018 a Report was submitted by the DGAP to this Authority under Rule 129 (6) of the CGST Act, 2017 stating that the allegation of profiteering was without any basis and hence, no meaningful investigation could be initiated by him. The Report submitted by the DGAP was considered by the Authority and vide it's order dated 24.04.2018 passed in Case No. 2/2018, it had directed the DGAP to conduct fresh investigation in the case and submit a comprehensive and detailed report as no opportunity of being heard had been granted to the above Applicant by the DGAP during the course of the investigation. 4. In consequence of the order dated 24.04.2018 the DGAP has submitted the present Report dated 17.09.2018 and intimated that vide e-mail dated 09.05.2018,
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to file his reply and vide e-mail dated 04.08.2018 he had submitted his detailed reply along with the following documents:- a) Purchase invoice of the Car sold to the above Applicant. b) Sale invoice of the Car sold to the above Applicant. c) Sample Sale and Purchase invoices of the same model Car as was sold to the above Applicant. d) Price lists applicable pre-GST (01.05.2017) and post-GST (01.07.2017). e) Worksheet showing details of the sale and purchase of 4 Cars of similar model. 5. The DGAP has mentioned in his Report that the Respondent had submitted that the trade of selling Cars was controlled by the manufacturers and the dealers were bound to follow the ex-show room prices fixed by the manufacturers. He has also mentioned that the Respondent had submitted that margin of the dealers had decreased by about ₹ 7,000/- per Car from the pre-GST regime while the sale price of the same Car had reduced by ₹ 15,683/- [Rs. (Pre-GST price) – Rs. (Post-GST price)]. 6. The DG
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Price 9,30,132.95 Table C Pre GST sale invoice dated 28.04.2017 Pre GST Amount (in Rs.) Dealer's Landed Price (A) 8,14,817 Dealer's Margin (B) 28,589 Total A+B) 8,43,406 VAT (D = of C) 1,26,510.9 Selling price (E= C+D) 9,69,916.9 Table D Post GST sale invoice dated 14.10.2017 issued to the Applicant Post GST Amount (in Rs.) Dealer's Price (excluding GST paid which is available as Input Tax Credit) (A) 6,41,471 Dealer Margin(B) 16,621 Total (C= A+B) 6,58,092 GST (D= 45% of C) 2,96, 141.4 Selling price (E= C+D) 9,54,233.4 7. The DGAP has further mentioned that the Respondent had submitted that he had received a discount of ₹ 4,500/- for achieving a predefined purchase and sale target for the pre-GST transactions and a trade discount of ₹ 9,000/- for the post-GST transactions. 8. The DGAP has also intimated that he had given an opportunity to the Applicant vide e-mail dated 04.09.2018, to inspect the nonconfidential evidences/reply furnished by the Respondent on a
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actions respectively, the total post-GST profit margin of the Respondent came to ₹ 25,621/- (Rs. 16,621/- + ₹ 9,000/-), which was less than the total pre-GST profit margin of FRS. 33,089/- (Rs. 28,589/- + FRS. 4,500/-). He has further observed that the reduced profit margin of the Respondent was also evident from the fact that the Respondent's post-GST purchase price was ₹ 6,906.05 less than the pre-GST purchase price [Rs. (-) ₹ 9,30,132.95/-]. He has also informed that the post-GST sale price was ₹ 15,683.50/- less than the pre-GST sale price [Rs. 9,69,916.90/- (-) ₹ 9,54,233.40/-] and therefore, the allegation of profiteering made by the Applicant was not established. The DGAP has further informed that the landed price charged by the Respondent in the post-GST sale invoice dated 14.10.2017 was ₹ 1,73,346/less than the landed price in the pre-GST sale invoice dated 28.04.2017 (FRS. (-) ₹ 6,41,471/-) due to the reason that in the pre-
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he has maintained that the allegation that the above Applicant had not been given the benefit of ITC by the Respondent was not proved. 10. Investigation Report received from the DGAP was considered in the meeting of the Authority held on 26th September, 2018 and it was decided to accord opportunity of hearing to the Applicant only as there was 'nil' profiteering established in this case by the DGAP. Accordingly, two hearing opportunities on 09.10.2018 and 29.10.2018 were accorded but the Applicant did not appear. Further, the Applicant vide his e-mail dated 01.11.2018 stated that he did not intend to make any further submissions in the matter. 11. The Authority has carefully considered the DGAP's Report, the written submissions of the above Applicant and the Respondent placed on record. The issues to be decided by the Authority in this case are as under:- 1) Whether there was any violation of the provisions of Section 171 of the CGST Act, 2017 in this case? 2) If yes then
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6,621/- in the post-GST period and after taking in to account the discounts of ₹ 4,500/- and ₹ 9,000/-, which the Respondent had received for achieving predefined purchase and sale targets for the above two periods the total post-GST profit margin of the Respondent was ₹ 25,621/- (Rs. 16,621/- + ₹ 9,000/-), which was less than the pre-GST profit margin of ₹ 33,089/- (Rs. 28,589/- + ₹ 4,500/-). It is also apparent that the reduced profit margin was due to the fact that the post-GST purchase price of the Respondent was ₹ 6,906.05 less than the pre-GST purchase price. It is also clear from the record that the postGST sale price charged by the Respondent was ₹ 15,683.50/- less than the pre-GST sale price. The record also reveals that the base price charged by the Respondent in the post-GST sale invoice dated 14.10.2017 was ₹ 1,73,346/- less than the base price in the preGST sale invoice dated 28.04.2017 due to the reason that in the pre
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