2019 (1) TMI 21 – NATIONAL ANTI-PROFITEERING AUTHORITY – 2019 (20) G. S. T. L. 391 (N. A. P. A.) – Profiteering – supply of the product “Paint (AP Apex Classic WT 10 LT (HSN Code 3209)) – benefit of reduction in the rate of tax of GST at the time of implementation of the GST – contravention of provisions of Section 171 of the CGST Act, 2017 – Held that:- It is evident that the Respondent has increased the base price of the product from ₹ 1855.05/- to ₹ 1859.55/- resulting in an increase of ₹ 4.50/-. In this context, it is apparent that the post-GST price before discount has been reduced from ₹ 2159/- to ₹ 1927/-. Also, the discount offered has been reduced from ₹ 75.57/- to ₹ 67.45/- i.e. by ₹ 8.12/- and hence post-GST, there is increase in the base price of ₹ 4.50/-. The increase in the base price is on account of the reduction in the discount. It is also revealed that the reduction in discount doesn't amount to profiteering as th
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ferred the present case to the Standing Committee on Anti-profiteering, alleging profiteering by the Respondent on the supply of the product Paint (AP Apex Classic WT 10 LT (HSN Code 3209)) , by not passing on the benefit of reduction in the rate of tax of GST at the time of implementation of the GST w.e.f. 01.07.2017. In this regard, the Kerala State Screening Committee had relied on two invoices issued by the Respondent, one dated 20.06.2017 (Pre-GST rate reduction) and the other dated 09.11.2017 (Post-GST rate reduction). 2. The above application was examined by the Standing Committee on Anti-Profiteering and was further referred to the DGAP vide minutes of it's meeting dated 02.07.2018 for detailed investigations under Rule 129 (1) of the CGST Rules, 2017. 3. The DGAP has stated in his Report dated 28.09.2018 that in the pre-GST era, the product Paint (AP Apex Classic WT 10 LT (HSN Code 3209)) attracted VAT @ 14.50% and the Central Excise Duty @ 12.50% on 70% of the MRP, in ter
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Rs.) L=H+K 530.48 520.67 13. Total Tax incident (%) M=L/I 28.60% 28% 14. Increase in Base Price Diff in I Rs.4.50/- (0.24%) 4. The DGAP has further stated that the total tax rate has been reduced from 28.60% to 28% post implementation of the GST. The DGAP has also submitted that the Respondent had increased the base price of the above product from ₹ 1855.05/- to ₹ 1859.55/- resulting in an increase of ₹ 4.50/- which was very negligible i.e. 0.24%. He has further submitted that post-GST, the price before discount had been reduced from ₹ 2159/- to ₹ 1927/- and the discount offered was reduced from ₹ 75.57/- to ₹ 67.45/- i.e. by ₹ 8.12/- hence the post-GST increase in the base price was ₹ 4.50/-. He has also contented that this increase was only of 0.24% which was primarily on account of the reduction in the discount and such an increase couldn't qualify as profiteering due to reduction in the tax rate, thus, the provisions of Sect
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4.50/-. In this context, it is apparent that the post-GST price before discount has been reduced from ₹ 2159/- to ₹ 1927/-. Also, the discount offered has been reduced from ₹ 75.57/- to ₹ 67.45/- i.e. by ₹ 8.12/- and hence post-GST, there is increase in the base price of ₹ 4.50/-. The increase in the base price is on account of the reduction in the discount. It is also revealed that the reduction in discount doesn't amount to profiteering as the same was offered from his profit margin by the Respondent and doesn't not form part of the base price and therefore, the Respondent cannot be held guilty under Section 171 of the Act. 8. Based on the above facts it is clear that the Respondent has not contravened the provisions of Section 171 of the CGST Act, 2017 and hence there is no merit in the application filed by the above Applicants and the same is accordingly dismissed. 9. A copy of this order be sent to both the Applicants and the Respondent
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