Maggi \u2013 the 10th case for National Anti-Profiteering Authority
By: – Prasanna CP
Goods and Services Tax – GST
Dated:- 11-10-2018<\/p>\n
SHRI ANKUR JAIN, DIRECTOR GENERAL ANTI-PROFITEERING, CENTRAL BOARD OF INDIRECT TAXES & CUSTOMS, VERSUS M\/S. KUNJ LUB MARKETING PVT. LTD. [ 2018 (10) TMI 510 – NATIONAL ANTI-PROFITEERING AUTHORITY ]
\nThe National Anti-Profiteering Authority has issued several order in the consumer sector addressing issues with respect to passing the benefits of reduction in GST rates to consumer by way commensurate reduction in selling price. Let us discuss about the recent order issued by the authority on sale of Maggi.
\nBackground of the case:
\nA consumer has purchased Maggi Noodle packs, each weighing 35 grams having MRP of ₹ 5 from the seller. Prior to 15.11.2017, the seller was charging 18% GST on the product's base price of ₹ 3.96 per pack, however, after the GST rate was reduced from 18% to 12% with effect from 15.11.2017, the Seller had st<\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n of GST rate reduction in respect of the product bearing MRP of ₹ 5 through other packs of Maggi Noodles having different basic weights. 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 due to legal tender issue, whereas on Maggi Noodles pack of 70 grams bearing MRP of ₹ 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 ₹ 11 and thus, the benefit in respect of ₹ 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 rate reduction had been passed on in respect of Maggie Noodles as a whole. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n uct or not? = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n er cannot be given or denied to another nor can the benefit given to one set of customers arbitrarily enhanced and set off against the another. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" Maggi \u2013 the 10th case for National Anti-Profiteering AuthorityBy: – Prasanna CPGoods and Services Tax – GSTDated:- 11-10-2018 SHRI ANKUR JAIN, DIRECTOR GENERAL ANTI-PROFITEERING, CENTRAL BOARD OF INDIRECT TAXES & CUSTOMS, VERSUS M\/S. KUNJ LUB MARKETING PVT. LTD. [ 2018 (10) TMI 510 – NATIONAL ANTI-PROFITEERING AUTHORITY ] The National Anti-Profiteering Authority has issued several … Continue reading “Maggi \u2013 the 10th case for National Anti-Profiteering Authority”<\/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-14422","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/14422","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=14422"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/14422\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14422"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14422"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14422"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\nAbse<\/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? If yes, then what was the quantum of profiteering?
\nAfter careful examination of DGAP's report and submissions from both applicant and respondent, the following observations were made by the Anti-Profiteering Authority.
\nProduct of concern
\nMRP per pack
\nPeriod of sales: 1st Nov to
\n14th Nov 2017
\nPeriod of sales: 15th Nov 2017
\nto 28th Feb 2018
\nAmount charged
\nBase price
\nGST rate
\nAmount charged
\nBase price
\nGST rate
\nMaggi 35 grams
\n5
\n4.67
\n3.96
\n18%
\n4.67
\n4.17
\n12%
\n * The respondent is required to reduce the MRP of the product by taking into effect of the reduction in rate of tax. The respondent further required to fix the MRP as per the provisions of the Legal Metrology (Packaged Commodities) Rules, 2011.
\n * As per rule 2(m) “retail sale price” means the maximum price at which the commodity in packaged form may be sold to consumer and the price shall be print<\/p>\n
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\n * Based on the perusal of the facts and sales figures it is clear that the respondent has not passed on the benefits of reduction in the GST rates to the consumers by way of commensurate reduction in prices, since the actual buyers of product Maggi 35 grams doesn't get reduced price benefit. This amounts to violation of section 171 of the CGST act, 2017.
\n * With reference to the above observations the quantum of profiteering for the period of concern 15th November to 28th Feb 2018 is computed as follows:
\nQty Sold
\nAmount charged
\nCommensurate price per unit
\nProfiteering per unit
\nTotal profiteering
\n 382,048
\n₹4.67
\n₹4.43
\n₹0.24
\n ₹91,692
\n Order:
\n The National Anti-Profiteering Authority vide order no. 10 dated 9th October directed the respondent (retail seller Kunj Lub Marketing Private Limited) to settle\/deposit<\/p>\n
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