Shri Shylesh Damodaran, Director General Anti-Profiteering, Central Board of Indirect Taxes & Customs Versus M/s. Landmark Automobiles Pvt. Ltd.
GST
2018 (12) TMI 1002 – THE NATIONAL ANTI-PROFITEERING AUTHORITY – 2019 (20) G. S. T. L. 379 (N. A. P. A.)
THE NATIONAL ANTI-PROFITEERING AUTHORITY – NAPA
Dated:- 17-12-2018
18/2018
GST
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 Rs. 9,54,234/- on which GST @ 28% and Cess @ 17% was charged, however the benefit of I
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ended for investigation, it couldn't reconsider it's decision as it had become '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
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vide his reply dated 01.08.2018 the Respondent had sought extension of time by 7 days 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 Rs. 7,000/- per Car from the pre-GST regime while the sale price of the same
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able B
Post GST purchase invoice dated 29.09.2017
Post GST
Amount (in Rs.)
Rate of Tax
Remarks
Base Price
6,41,471
GST
2,88,661.95
45
28% GST +17% Cess on Cars longer than 4 mtrs.
Dealer's Landed 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 Rs. 4,500/- for achieving a predefined purchase and sale target for the pre-GST trans
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in the post-GST era. He has also observed that even after taking in to account the trade discounts of Rs. 4,500/- and Rs. 9,000/-, which the Respondent had received for achieving pre-defined purchase and sale targets for the pre-GST and post-GST transactions respectively, the total post-GST profit margin of the Respondent came to Rs. 25,621/- (Rs. 16,621/- + Rs. 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 Rs. 6,906.05 less than the pre-GST purchase price [Rs. (-) Rs. 9,30,132.95/-]. He has also informed that the post-GST sale price was Rs. 15,683.50/- less than the pre-GST sale price [Rs. 9,69,916.90/- (-) Rs. 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 ch
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and post-GST sale invoices issued by the Respondent revealed that the base price charged from the above Applicant was reduced as the benefit of ITC had been passed on by the Respondent to the Applicant No. 1. Therefore, 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
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in tax rate is not sustainable. It is also revealed from the perusal of the record that the profit margin of the Respondent had got reduced from Rs. 28,589/- which he was receiving in the pre-GST period to Rs. 16,621/- in the post-GST period and after taking in to account the discounts of Rs. 4,500/- and Rs. 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 Rs. 25,621/- (Rs. 16,621/- + Rs. 9,000/-), which was less than the pre-GST profit margin of Rs. 33,089/- (Rs. 28,589/- + Rs. 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 Rs. 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 Rs. 15,683.50/- less than the pre-GST sale price. The record also reveals that the base price charged by the Re
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