FIRST CASE ON ANTI-PROFITEERING PROVISIONS IN GST
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 5-5-2018<\/p>\n
The provisions on anti-profiteering are contained in the GST law as per following provisions:
\nCGST Act, 2017
\nSection 171 on Anti-profiteering measures.
\nIGST Act, 2017
\nSection 20 which stipulate that provisions of the GST Act, 2017 shall apply mutatis mutandis to IGST Act.
\nUTGST Act, 2017
\nSection 21 which stipulate that provisions of GST Act, 2017 shall apply mutatis mutandis to UTGST Act.
\nSGST Act, 2017
\nSection 171 on Anti-profiteering measures.
\nThe Rules for Anti Profiteering are contained in Chapter XV (Rule Nos. 122 to 137) of the Central Goods and Services Tax Rules, 2017.
\nThe GST law contains a provision on anti-profiteering measure as a deterrent for trade and industry to enjoy unjust enrichment in terms of profit arising out of implementation of Goods and Services Tax in India, i.e., anti-profiteering measure would obligate the busin<\/p>\n
= = = = = = = =<\/p>\n
Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n n. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n f the reduction in tax rate after GST to the applicant by way of reduction in the price of the car by ₹ 10,550. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n o Alabaster Silver (base colour), as per the applicant's request. It was also put on record that on GST being implemented w.e.f. 1.7.2017, ex-showroom price was subsequently changed which was charged from the customer. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n \n– = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n applicant an ex-showroom price of ₹ 8,98,750\/- which correctly included basic price of the car, freight, insurance, dealer's margin etc, and GST @ 29%. Thus, the benefit of reduction in the tax rate was passed on to the applicant by way of reduction in the price of the car of base colour by an amount of ₹ 10,550\/-. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" FIRST CASE ON ANTI-PROFITEERING PROVISIONS IN GSTBy: – Dr. Sanjiv Agarwal Goods and Services Tax – GSTDated:- 5-5-2018 The provisions on anti-profiteering are contained in the GST law as per following provisions: CGST Act, 2017 Section 171 on Anti-profiteering measures. IGST Act, 2017 Section 20 which stipulate that provisions of the GST Act, 2017 shall … Continue reading “FIRST CASE ON ANTI-PROFITEERING PROVISIONS IN GST”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-11682","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/11682","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11682"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/11682\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11682"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11682"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11682"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
For full text:-Visit the Source <\/a><\/p>\n
\nThe authority constituted by Central Government will have powers to impose a penalty in case it finds that the price being charged has not been reduced consequent to reduction in rate of tax or allowance of input tax credit.
\nDuring the two years of initial transition into GST regime, Anti-Profiteering Authority (APA) will step in and may ask businesses that have not passed on full benefits of reduced tax burden to consumers to make up for such benefit, with interest.
\nJudicial Pronouncement
\nThere provisions have been subjected to judicial scrutiny by the National Anti-Profiteering Authority (NAA) set up under the CGST Act, 2017 recently in Dinesh Mohan Bharadwaj v. M\/s Vrandavaneshwree Automotive Pvt. Ltd [ 2018 (4) TMI 1377 – THE NATIONAL ANTI-PROFITEERING AUTHORITY ] vide Order dated 27.03.2018 [Case No. 1\/2018 instituted on 27.02.2018]
\nImportant Dates
\n01.11.2017
\nApplication filed before Standing Committee [Rule 123 (1)]
\n28.04.2017
\nVehicle booked
\n11.07.2017
\nVehicle del<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\n"We find that the respondent (Honda car dealer) has given details of all the basic components of the price of the car purchased by the applicant … and benefit of ₹ 10,550 on account of reduction of tax by about 2 per cent viz. from 31.254 percent (pre GST) to 29 percent (post GST) has already been passed on to the applicant and the amount of ₹ 10,550 is inclusive of the ITC (input tax credit) … therefore, no additional benefit on account of ITC is required to be paid by the respondent”.
\nIt was thus held that the respondent (Honda car dealer) has not contravened the provisions of Section 171 of the CGST Act, 2017, and accordingly, there was no merit in the application of Dinesh Mohan Bhardwaj (complainant or applicant), which was filed under Rule 128 of the CGST Tax Rules, 2017 and the same was dismissed.
\nDetails of Complaint
\nThe complainant had <\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nThe car dealer also submitted the following documents to substantiate its stand:
\n * Audited Balance Sheet & Profit & Loss account for the FY 2016-17,
\n * Copies of purchase invoices from April to September, 2017,
\n * Copies of retail invoices from April to September, 2017,
\n * Copies of returns filed with the Commercial Taxes Department from April to June, 2017,
\n * Price Lists (pre-GST & post-GST), and
\n * Copies of Service Tax returns from April to September, 2017.
\nDGSG Stand
\nDirector General of Safeguards (DGSG) investigated the complaint on the following two grounds:
\n * Whether there was substantial reduction in the rate of tax, and
\n * Whether the benefit of reduction in tax rate had been passed on to the applicant.
\nDGSG found that the dealer's margin was<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nTotal (A)
\n14.625
\n–
\nCST(B=0.05% on A)
\n0.007
\n–
\nTotal (C= A+B)
\n14,632
\n–
\nVAT (D) = (14.5% on C)
\n16,622
\n–
\nGST + Cess
\n–
\n29
\nTotal tax rate (C+D)
\n31,254
\n29
\nThe pre-GST and post -GST ex-showroom prices of the car purchased by the applicant were also worked out by the DGSG as per Table 'B' below:
\nTable B – Comparative Prices
\nParticulars
\nFactor
\nPre-GST
\n (in Rs)
\nPost-GST
\n(in Rs)
\nBasic price of Honda Car Model : WR WR-V.1.2VX MT (i-VTEC)
\nA
\n6,59,175
\n6,58,718
\nExcise Duty @ 12.5%
\nB=A*12.5%
\n82,397
\n–
\nNCCD @ 1%
\nC=A*1%
\n6,592
\n–
\nAuto Cess @ 0.125%
\nD=A*0.125%
\n824
\n–
\nInfra Cess @1%
\nE=A*1%
\n6,592
\n–
\nEx-factory Price
\nF= Add A to E
\n7,55,579
\n6,58,718
\nCST @ 0.05%
\nG=F*05%
\n378
\n–
\nFreight
\nH
\n4,452
\n4,260
\nTransit Insurance
\nI
\n121
\n108
\nDealer Landed Price
\nJ=Add F to I
\n7,60,530
\n6,63,086
\nDealer Margin
\nK
\n33,619
\n33,619
\nDealer Price
\nL=J+K
\n7,94,149
\n6,96,705
\nVAT @ 14.5%
\nM=L*14.5%
\n1,15,152
\nGST+Cess @ 29%
\nN=L*29%
\n2,02,044
\nEx-showroom price of Alabast<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nThe Authority, on benefit of input tax credit, observed that the applicant has not understood the provisions of Section 171 of the CGST Act, 2017 and the DGSG's report in its true spirit and context. The entire scheme of GST is ITC based i.e. the recipient of the goods and services takes credit of GST paid by him on purchase of goods and services and uses such ITC while discharging GST output tax liability on supply of goods and services.
\nThe benefit of ₹ 10,550\/- on account of reduction of tax by about 2% viz. from 31.254% (pre-GST) to 29% (post-GST), as discussed above, had already been passed on to the applicant and the amount of ₹ 10,550<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n