Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

Home Case Index All Cases GST GST + NAPA GST - 2020 (9) TMI NAPA This

  • Login
  • Cases Cited
  • Summary

Forgot password       New User/ Regiser

⇒ Register to get Live Demo



 

2020 (9) TMI 775 - NAPA - GST


Issues: Violation of anti-profiteering provisions, imposition of penalty under Section 122 of the CGST Act, 2017

Violation of Anti-Profiteering Provisions:
The case involved an investigation by the DGAP based on a complaint, revealing that the Respondent did not pass on the benefit of a GST rate reduction from 18% to 5% on footwear, violating Section 171(1) of the CGST Act, 2017. The DGAP found that the Respondent denied this benefit to customers, leading to an amount of ?6,55,307 being deemed as profiteering. The National Anti-Profiteering Authority, after due consideration, issued a notice to the Respondent who was later found in violation of Section 171(1) and directed to pay the profiteered amount.

Imposition of Penalty under Section 122:
During the proceedings, it was noted that the Respondent not only collected extra amounts for footwear but also compelled customers to pay additional GST, potentially violating Section 122(1)(i) of the CGST Act, 2017. The Respondent was issued a notice to explain why penalties under Section 122 should not be imposed. The Respondent argued against the penalty, stating that the entire profiteered amount had been deposited in the Consumer Welfare Funds within the stipulated time. The DGAP confirmed this deposition, leading to a discussion on whether penalties should be imposed despite compliance.

Analysis and Conclusion:
Upon careful review, it was determined that the Respondent did violate Section 171(1) by not passing on the GST rate reduction benefits. However, it was highlighted that Section 122(1)(i) did not cover this specific violation, as it pertained to incorrect invoicing rather than anti-profiteering. Furthermore, as penalty provisions under Section 171(3A) were introduced post the violation period, retrospective penalties could not be imposed. Consequently, the penalty notice issued under Section 122(1)(i) was withdrawn, and penalty proceedings against the Respondent were dropped. The Respondent's compliance with depositing the profiteered amount and interest was acknowledged, leading to the conclusion that no penalty could be imposed for the anti-profiteering violation during the specified period.

 

 

 

 

Quick Updates:Latest Updates