NO PROFITEERING WHEN ITC BENEFIT PASSED ON
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 4-1-2019<\/p>\n
In yet another complaint under section 171 of CGST Act, 2017 for anti-profiteering against an automobile dealer, charges could not be proved before National Anti-profiteering Authority (NAA). The NAA vide its Order dated 17.12.2018 in Shylesh Damodaran and DGAP, New Delhi v. Landmark Automobiles Pvt. Ltd. (2018) 12 TMI 1002 (NAA) has dismissed the compliant as not maintainable since it could not be proved that there was any violation of the provisions of section 171 of the CGST Act, 2017. It was observed that the Honda car dealer had not passed on the burden of the input tax to the complainant as it was eligible to claim input tax credit on the same. Thus the allegation that benefit of ITC was not given was not proved. It may be noted that this is the second complaint against a car dealer dealt with by the NAA, first being in the matter of Vrandavaneshwree <\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ing Committee had returned the application on 28.02.2018 to the DGAP stating that once the application had been recommended for investigation, it couldn't reconsider it's decision as it had become 'functus officio'. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n profit margin of the dealer had been reduced from ₹ 28,589\/- which it was getting in the pre-GST era to ₹ 16,621\/- in the post-GST era. Even after taking in to account the trade discounts of ₹ 4,500\/- and ₹ 9,000\/-, which the dealer had received for achieving pre-defined purchase and sale targets for the pre-GST and post-GST transactions respectively, the total post-GST profit margin of the dealer came to ₹ 25,621\/- (Rs. 16,621\/- + ₹ 9,000\/-), which was less than the total pre-GST profit margin of ₹ 33,089\/- (Rs. 28,589\/- + ₹ 4,500\/-). The reduced profit margin of the dealer was also evident from the fact that the dealer's post-GST purchase price was ₹ 6,906.05 less than the pre-GST purchase price [Rs. (-) ₹ 9,30,132.95\/-]. Further, the post-GST sale price was ₹ 15,683.50\/- less than the pre-GST sale price [Rs. 9,69,916.90\/- (-) ₹ 9,54,233.40\/-] and therefore, the allegation of profiteering made by the complain<\/p>\n = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ost-GST sale invoices issued by the dealer revealed that the base price charged from the complainant was reduced as the benefit of ITC had been passed on by the dealer to the complainant. Therefore, the allegation that complainant had not been given the benefit of ITC by the dealer was not proved. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" NO PROFITEERING WHEN ITC BENEFIT PASSED ONBy: – Dr. Sanjiv Agarwal Goods and Services Tax – GSTDated:- 4-1-2019 In yet another complaint under section 171 of CGST Act, 2017 for anti-profiteering against an automobile dealer, charges could not be proved before National Anti-profiteering Authority (NAA). The NAA vide its Order dated 17.12.2018 in Shylesh Damodaran … Continue reading “NO PROFITEERING WHEN ITC BENEFIT PASSED ON”<\/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-15916","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/15916","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=15916"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/15916\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15916"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15916"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15916"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\nThe DGAP, therefore, re-examined the complaint and reported to the NAA that allegation of profiteering was without any basis and hence, no meaningful investigation could be initiated by him. However, NAA directed the DGAP to conduct fresh investigation in the case and submit a comprehensive and detailed report as no opportunity of being heard had been granted to the complainant by the DGAP.
\nThe details were sought from the complainant as well as dealer. The dealer submitted the following documents for investigation:
\n * Purchase invoice of the Car sold to the complainant.
\n * Sale invoice of the Car sold to the complainant.
\n * Sample sale and purchase invoices of the same model car as was sold to the complainant.
\n * Price lists applicable pre-GST (as on <\/p>\n
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\nNAA Findings
\nThe NAA decided to accord opportunity of hearing to the complainant only as there was 'nil' profiteering established in the instant case by the DGAP, but it was not availed.
\nThe NAA considered all submissions and DGAP report to decide on:
\n * Whether there was any violation of the provisions of Section 171 of the CGST Act, 2017 in the instant case?
\n\tIf yes, then what was the quantum of profiteering?
\nIt was observed that it is clear from the plain reading of Section 171 (1) that it 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 the ITC. On the issue of red<\/p>\n
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