Goods and Services Tax – GST – By: – Mr. M. GOVINDARAJAN – Dated:- 25-1-2019 – Anti Profiteering Measure Section 171(1) of the Central Goods and Services Tax Act, 2017 provides that any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices. Section 171 deals with two situations- one relating to the passing on the benefit of reduction in the rate of tax; and the second pertaining to the passing on the benefit of ITC. In this articles some of the case laws are discussed in which cases the anti-profiteering has not been attracted. Change in tax rate There may be circumstances for change of tax rate as detailed below- Reduction of tax rate in the post GST period than the pre GST period; Reduction of tax rate in the post GST period after 01.04.2017 by the decision taken by the GST Council in the meeting.There are many occasions the Council reduced rates of taxes.Recently
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– 2018 (12) TMI 1002 – THE NATIONAL ANTI-PROFITEERING AUTHORITY, the Authority found that from the DGAP s investigation report that there was no reduction in the tax rates, the allegation of profiteering by the respondent on account of change in rate is not sustainable. In State Level Screening Committee on Anti Profiteering, Kerala v. Zeba Distributors – 2018 (12) TMI 1001 – THE NATIONAL ANTI-PROFITEERING AUTHORITY, it was alleged profiteering by the respondent on the supply of Eastern Meat Masala (HSN Code No.0910) by not passing on the benefit of reduction in the rate of tax at the time of implementation of GST. The DGAP has intimated that there was no reduction in the rate of tax on the product which was 5% both in the pre-GST era well as in the post GST era. The respondent did not increase the per unit base price (excluding tax) of the product which was ₹ 238/- during both the periods. The Authority held that the provisions of anti-profiteering would not attract in the case
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ROFITEERING AUTHORITY, it was alleged anti-profiteering by the respondent on the supply of Granure Hard Nero-10MM & Granure Hard Crema – 10 MM Tiles by not passing on the benefit of reduction in the rate of tax of GST with effect from 15.11.2017 from 28% to 18%. The Authority found from the report that the sale price of these products was reduced from ₹ 1037.52 (pre GST revision) to ₹ 840.68 (post GST revision) when the GST rate on the above items was revised from 28% to 18%. Thus it is clear that the base prices have not been changed and accordingly the selling prices of the products have been reduced. The respondent has duly passed on the benefit of reduction of tax rate by the keeping the base price constant thus reducing the selling price of the products in question. Therefore the anti profiteering provisions are not attracted. Passing on the benefit of ITC In Shylesh Damodaran v. Landmark Automobiles Private Limited – 2018 (12) TMI 1002 – THE NATIONAL ANTI-PROFITEE
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e respondent revealed that the base price charged from the applicant had been reduced as the benefit of ITC was passed on by the respondent to the applicant. Therefore the allegation that the applicant had not been given the benefit of ITC by the respondent was not proved. The Authority dismissed the application of the applicant. Reduction in discount In Kerala State Screening Committee on Anti-profiteering v. Asian paints Limited – 2019 (1) TMI 21 – NATIONAL ANTI-PROFITEERING AUTHORITY it was alleged anti profiteering by the respondent on the supply of the product Paint [AP Apex Classic WT 10 LT (HSN Code 3209)] by not passing the benefit of reduction in the rate of tax of GST at the time of its implementation. The Authority found that the respondent has increased the sale price of the product from ₹ 1855.05 to ₹ 1859.55 resulting in the increase of ₹ 4.50. It is apparent that the post GST price before discount has been reduced from ₹ 2159/- to ₹ 1927/-.
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