Shri Ankur Jain, Director General Anti-Profiteering, Central Board of Indirect Taxes & Customs, Versus M\/s. Kunj Lub Marketing Pvt. Ltd.,
GST
2018 (10) TMI 510 – NATIONAL ANTI-PROFITEERING AUTHORITY – 2018 (19) G. S. T. L. 84 (N. A. P. A.)
NATIONAL ANTI-PROFITEERING AUTHORITY – NAPA
Dated:- 8-10-2018
10\/2018
GST
SH. B. N. SHARMA, CHAIRMAN, SH. J. C. CHAUHAN, TECHNICAL MEMBER, SH. AMAND SHAH, TECHNICAL MEMBER
\nPresent:-
\nNone for the Applicant No. 1.
\nSh. Bhupender Goyal, Assistant Director (Costs) for the Applicant No.2.
\nNone for the Respondent.
\nORDER
\n1. An application through email dated 29.11.2017 was filed before the Standing Committee on Anti-profiteering under Rule 128 of the Central Goods and Services Tax (CGST) Rules, 2017 by the Applicant No. 1 stating that he had purchased Maggi Noodle packs, each weighing 35 Gms., having Maximum Retail Price (MRP) of Rs. 5\/- (here-in-after referred to as “the product”) from the Respondent on 06.11.2017 vide<\/p>\n
= = = = = = = =<\/p>\n
Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n the Director General of Safeguards (DGSG), now re-designated as Director General Anti-Profiteering (DGAP) in order to initiate an investigation and collect evidence necessary to determine whether the benefit of reduction in the rate of tax on the above product had been passed on by the Respondent to the Applicant or not? = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n hom the Respondent had been selling Nestle's products. The Respondent had also submitted that he had passed on the benefit of GST rate reduction in respect of the product bearing MRP of Rs. 5\/- through other packs of Maggi Noodles having different grammage. The Respondent had further submitted that in the case of the product the price reduction would have been around 21 paise to the retailer and around 25 paise to the ultimate consumer which would have been inconvenient to both the retailer and the consumer whereas on Maggi Noodles pack of 70 Gms. bearing MRP of Rs. 12\/- per pack, the benefit on account of GST rate reduction for the retailer would have been approximately 56 paise against which the respondent had reduced the price by 92 paise with reduced MRP of Rs. 11\/- and thus, the benefit in respect of Rs. 5\/- MRP pack had been passed on by reducing the price of other packs of Maggi Noodles by more than what was required. Therefore, the Respondent had claimed that the benefit of GST<\/p>\n = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n on 171 of the CGST Act, 2017 or not?. He has stated in his report that the Central Government, on the recommendation of the GST Council, had reduced the GST rate on the product from 18% to 12%, vide Notification No. 41\/2017-Central Tax (Rate) dated 14.11.2017, w.e.f. 15.11.2017 which had not been disputed by the Respondent. The DGAP has also stated that the Respondent has not contested the allegation of not passing on the benefit of reduction in the rate of GST from 18% to 12% on the product w.e.f. 15.11.2017 but instead the Respondent has contended that in the case of the product the MRP of which was Rs. 5\/-, the benefit of GST rate reduction to the Applicant No. 1 as retailer and to the ultimate consumer would have been 21 paise and 25 paise respectively, which would have been inconvenient to both due to legal tender issues. The DGAP has further stated that the Respondent has contended that he has passed on the benefit of GST rate reduction in respect of 70 Gm. pack of Maggi Noodles <\/p>\n = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n e benefit available to the buyer on one item could not be denied by offering more than the required benefit to the buyer of the other item. The DGAP has also contended that such a proposition would work against the recipients of the product and the law did not provide for such adjustments. Therefore, the DGAP has concluded that the Respondent has not passed on the benefit of GST rate reduction to the recipients of the product including the Applicant No. 1. Accordingly, the DGAP has calculated the profiteered amount of Rs. 90,778\/- including the profiteered amount of Rs. 2,253\/- charged by the Respondent from the Applicant No.1 as has been shown below:- = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n 2018. The Respondent through his e-mail dated 23rd July, 2017, requested for adjournment of hearing due to his personal difficulties and the Authority had acceded to the request and adjourned the hearing to 9th Aug, 2018. The Respondent again requested for adjournment of the hearing through his e-mail dated 8th August, 2018 and another date of hearing was fixed on 23rd August, 2018, however, the Respondent again did not appear. A letter dated 31.08.2018 was received on 05th Sept, 2018 from the Respondent stating that he had submitted his final reply vide his email\/letter dated 21st Aug, 2018 which should be taken in to account while passing order in the present proceedings. In the interest of justice, the Authority had accorded last opportunity of hearing to the Respodent on 10th Sep, 2018 but the Respondent did not attended therefore, there was no other alternative except to proceed against the Respondent exparte. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ot? = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ired of him was that he should have only reduced the MRP of the product by taking in to accout the effect of the reduction in the rate of tax. The Respondent was further required to fix the MRP keeping in view the provisions of the Legal Metrology (Packaged Commodities) Rules, 2011 which prescribe the methodology of fixining the MRP keeping in view the rounding off the price. The Respondent had no mandate to deny the benefit of reduction of the tax rate due to the problem of legal tenders as he had no legal authority to fix MRP arbitrarily. It was for the customers to furnish the required legal tenders and therefore, the Respondent can not be allowed to resort to profiteering. The Ministry of Consumer Affairs has alredy issued detailed instructions vide it's Notification dated 16.11.2017 for notifying the reduced MRP which have not been followed by the above Respondent. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n the Respondent is directed to reduce the price of the product commensurate to the reduction in the rate of tax. He is also directed to refund an amount of Rs. 2,253\/- to the Applicant No. 1 alongwith interest @ 18% P. A. from the date form which the above amount was collected by the Respondent from him. Since the other customers of the product are not identifiable, the Respondent is hereby directed to deposit the balance amount of Rs. 88,525\/- along with the interest at 18% P.A. till the date of deposit in the respective Central or State Consumer Welfare Fund within a period of 3 months from the date of receipt of this order. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" Shri Ankur Jain, Director General Anti-Profiteering, Central Board of Indirect Taxes & Customs, Versus M\/s. Kunj Lub Marketing Pvt. Ltd.,GST2018 (10) TMI 510 – NATIONAL ANTI-PROFITEERING AUTHORITY – 2018 (19) G. S. T. L. 84 (N. A. P. A.)NATIONAL ANTI-PROFITEERING AUTHORITY – NAPADated:- 8-10-201810\/2018 GSTSH. B. N. SHARMA, CHAIRMAN, SH. J. C. CHAUHAN, TECHNICAL MEMBER, … Continue reading “Shri Ankur Jain, Director General Anti-Profiteering, Central Board of Indirect Taxes & Customs, Versus M\/s. Kunj Lub Marketing Pvt. Ltd.,”<\/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-14381","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/14381","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=14381"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/14381\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14381"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14381"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14381"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\n2. On receipt of the reference from the Standing Committee on Anti-Profiteering, the Respondent was called upon by the DGAP to submit his reply as to whether he admitted that the benefit of reduction in the GST rate had not been passed on to the above Applicant by way of commensurate reduction in the price. The Respondent was also asked to suo-moto determine the quantum of benefit not passed on and indicate the same in his reply to the Notice. Certain documents viz. Balance Sheet, GST Returns (1 & 3B), details of outward taxable supplies etc. were also sought from the Respondent by the DGAP. Incidentally the date of invoice No. N1611 was found to be 05.11.2017 instea<\/p>\n
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\n(Amount in Rs.)
\nSr.No.
\nProduct
\nMRP
\n1st Nov. to 14th Nov. 2017
\n15th Nov. 2017 to 28th Feb. 2018
\nCommensurate Price per unit
\nProfiteering Per unit
\nTotal Profiteering
\nAmount Charged
\nBase Price
\nGST Rate
\nQty. Sold
\nAmount Charged
\nBase Price
\nGST Rate
\nQty. Sold
\nA
\nB
\nC
\nD
\nE
\nF
\nG
\nH
\nI
\nJ
\nK
\nL=112% of E
\nM=[H-L]
\nN=[K*M]
\n1\n<\/p>\n
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\n7. Perusal of the letter dated 21.08.2018 written by the Respondent sh<\/p>\n
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\n2) Whether there was any violation of the provisions of Section 171 of the CGST Act, 2017 in this case?
\n3) If yes then what was the quantum of profiteering?
\n9. Perusal of Section 171 of the CGST Act shows that it provides as under:-
\n(1). “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.”
\n(2). The Central Government may, on recommendations of the Council, by notification, constitute an Authority, or empower an existing Authority constituted under any law for the time being in force, to examine whether input tax credits availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him.
\n(3). The Authority referred to in sub-section (2) shall exercise such powers and discharge such functions as may be prescribed. 171. (1)
\n10. It is appar<\/p>\n
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\n12. It is further apparent from the record that the Respondent has contended that he had passed on the benefit in re<\/p>\n
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\n14. It is evident from the above that the Respondent had denied benefit of the reduction in GST rate to the consumers in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and has thus realized more price from them than he was entitled to collect and had also compelled them to pay more GST than that they were required to pay by issuing inco<\/p>\n
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