REDUCTION IN DISCOUNT IS NOT PROFITEERING: GST
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 1-3-2019<\/p>\n
Can reduction in discount offered by supplier of goods resulting in increase in price amounts to profiteering in contravention of section 171 of CGST Act, 2017 ? The answer is NO, as affirmed by National Anti-Profiteering Authority (NAA).
\nIn Kerala State Screening Committee on Anti-profiteering and DGAP, CBIC, New Delhi v. Asian Paints Ltd., Kerala 2019 (1) TMI 21 – NATIONAL ANTI-PROFITEERING AUTHORITY ; , the NAA, vide its Order dated 27.12.2018, has ordered that where base price is increased due to reduction in discount, it does not amount to profiteering as discount is offered from the profit margin whic<\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n , taxes etc: = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n .24% which was primarily on account of the reduction in the discount and such an increase couldn't qualify as profiteering due to reduction in the tax rate, thus, the provisions of Section 171 (1) of the CGST Act, 2017 relating to profiteering were not contravened in the instant case. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" REDUCTION IN DISCOUNT IS NOT PROFITEERING: GSTBy: – Dr. Sanjiv Agarwal Goods and Services Tax – GSTDated:- 1-3-2019 Can reduction in discount offered by supplier of goods resulting in increase in price amounts to profiteering in contravention of section 171 of CGST Act, 2017 ? The answer is NO, as affirmed by National Anti-Profiteering Authority … Continue reading “REDUCTION IN DISCOUNT IS NOT PROFITEERING: 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-17078","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/17078","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=17078"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/17078\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=17078"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=17078"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=17078"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\nParticulars
\nPeriod
\nDetails
\nReference
\nPre-GST
\nPost-GST
\n1.
\nProduct Description
\nA
\nPaint (AP Apex Classic WT 10 LT (HSN Code 3209)
\n2.
\nInvoice No.
\nB
\n13006429
\nKR1701110400
\n3.
\nInvoice Date
\nC
\n20.06.2017
\n09.11.2017
\n4.
\nMRP as per Annexure-7 (Rs.)
\nD
\n2.610
\n2,660
\n5.
\nPrice before discount per unit (Rs.)
\nE
\n2,159
\n1,927
\n6.
\nDiscount per unit (Rs.)
\nF
\n75.57
\n67.45
\n7.
\nPrice after discount per unit (Rs.)
\nG=E-F
\n2,083.43
\n1,859.55
\n8.
\nCentral Excise Duty @12.5% on 70% of MRP (Rs.)
\nH=(D*70%)*12.5%
\n228.38
\n–
\n9.
\nBase Price (Excluding duties & taxes) (Rs.)
\nI=G-H
\n1,855.05
\n1,859.55
\n10.
\nTax Rate Charged (%)
\nJ
\n14.50% VAT
\n28% GST
\n11.
\nTax Amount (VAT or GST) (Rs.)
\nK=G*J
\n302.10
\n520.67
\n12.
\nTota<\/p>\n
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\nThe NAA based on DGAP report, invoices etc, examined whether there was any reduction in the GST rate and whether the benefit of reduction in the rate of tax was passed on or not to the recipient as provided under Section 171 of the CGST Act, 2017. It observed that supplier had increased the base price of the product from ₹ 1855.05\/- to ₹ 1859.55\/- resulting in an increase of ₹ 4.50\/-. In this context, it was clear that the post-GST price<\/p>\n
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