2019 (3) TMI 429 – NATIONAL ANTI-PROFITEERING AUTHORITY – TMI – Profiteering – Caribbean Wood Tile – benefit of reduction in the rate of tax no passed on – contravention of Section 171 of the Central Goods & Service Tax (CGST) Act, 2017 – Held that:- There was no reduction of tax with the introduction of GST. The DGAP on examining various facts has categorically mentioned that the invoices very clearly show that no VAT was levied and CST was also exempted prior to 01.07.2017. In fact the rate of tax has increased from Central Excise Duty 13.97% to GST 28% w.e.f. 01.07.2017. Therefore, the allegation of profiteering is not sustainable in terms of Section 171 of the CGST Act, 2017 as there has been no reduction in the rate of tax.
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There is no merit in the application – application dismissed. – Case No. 14/2019 Dated:- 1-3-2019 – Sh. B. N. Sharma, Chairman, Sh. J. C. Chauhan, Technical Member, Ms. R. Bhagyadevi, Technical Member And Amand Shah, Technical Member Ms. A. Shainamol, A
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he above reference was examined by the Standing Committee on Anti-Profiteering and was further referred to the DGAP vide minutes of its meeting dated 02.07.2018 for detailed investigations under Rule 129 (1) of the CGST Rules, 2017. 3. The Directorate General of Anti-Profiteering (DGAP), after detailed investigation submitted its present report dated 03.10.2018 under Rule 129 (6) of the CGST Rules, 2017. 4. The DGAP has observed that in the pre-GST era, the rate of tax applicable on the product was Central Excise Duty @ 12.5% of the 60% of the MRP and there was no VAT or CST charged in the invoice whereas after implementation of the GST w.e.f. 01.07.2017, the tax rate of GST on the said product was fixed at 28%. The DGAP has further furnished the pre-GST & the post-GST sale invoice-wise details of the applicable tax rate and base price (excluding CST or GST) of the said product supplied by the Respondent in the table given below:- Period Pre-GST (prior to 01.07.2017) Post-GST (post
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gation of profiteering by the Respondent was not established 6. The above report was considered by the Authority in its meeting held on 03.10.2018 and it was decided that since there was no complainant/other applicant in this case, the Kerala Screening Committee be asked to appear before the Authority on 18.10.2018. Since, no one appeared for the hearing on 18.10.2018, the Authority decided to ask Kerala Screening Committee to appear before the Authority on 31.10.2018. Ms. A. Shainamol, Additional Commissioner, SGST, Kerala appeared on behalf of the Applicant No. 1 on 31.10.2018. During the hearing, it was observed that the DGAP report had not considered the MRP and base price (excluding VAT) of the product in question. 7. The Authority accordingly vide its letter dated 13.12.2018 had returned the report to the DGAP for re-investigation on the above mentioned issue under Rule 133(4) of the CGST Rules, 2017. 8. The DGAP vide his Report dated 20.12.2018 has submitted that as per Annexure
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al Excise duty was leviable @ 12.5% on 60% of the MRP(40 0/o abatement). Since the transaction had taken place at a price lower than the MRP, the MRP has no bearing on the allegation of profiteering. 9. The DGAP has further observed that in the pre-GST invoice dated 27.04.2017, there was no VAT (transaction was exempt from CST) and the Central Excise duty amounted to 13.97%, there was no reduction in the tax rate post implementation of GST. In fact, post-GST, the tax rate increased from 13.97% to 28%. Hence, Section 171 of the CGST Act, 2017, is not attracted. 10. We have carefully examined the report of the DGAP and the documents placed on record and find that the only issue that needs to be dwelled upon is as to whether there was reduction in the rate of tax on the product in question after introduction of GST and whether the provisions of section 171 of CGST Act, 2017, are attracted. Perusal of Section 171 of the CGST Act, 2017, reads as under:- (1). Any reduction in rate of tax on
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