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2020 (12) TMI 889 - NATIONAL ANTI-PROFITEERING AUTHORITYProfiteering - restaurant service supplied by the Respondent - allegation that the Respondent had increased the base prices of his products and had not passed on the benefit of reduction in the GST rate from 18% to 5% w.e.f. 15.11.2017 vide Notification No.46/2017-Central Tax (Rate) dated 14.11.2017 by way of commensurate reduction in prices - contravention of Section 171 of the Central Goods and Services Tax Act, 2017 - penalty - HELD THAT:- It is revealed from the record that the Respondent is running a restaurant as a franchisee of M/s Subway India Private Limited in Maharashtra and is supplying various food products to the customers. It is also revealed from the plain reading of Section 171 (1) of he CGST Act, 2017 that it deals with two situations one relating to the passing on the benefit of reduction in the rate of tax and the second about the passing on the benefit of the ITC. On the issue of reduction in the tax rate, it is apparent from the record that there has been a reduction in the rate of tax from 18% to 5% w.e.f. 15.11.2017, on the restaurant service being supplied by the Respondent, vide Notification No. 46/2017-Central Tax (Rate) dated 14.11.2017 without the benefit of ITC. Therefore, the Respondent is liable to pass on the benefit of tax reduction to his customers in terms of Section 171 (1) of the above Act. It is also apparent that the present investigation has been carried out w.e.f. 15.11.2017 to 31.03.2019. It is also evident that the Respondent has been dealing with a total of 280 items during the period from 15.11.2017 to 31.03.2019. Upon comparing the average selling prices as per the details submitted by the Respondent for the period from 01.07.2017 to 14.11.2017 and the actual selling prices post rate reduction, i.e. w.e.f. 15.11.2017 to 31.03.2019 the DGAP has reported that the GST rate of 5% has been charged w.e.f. 15.11.2017 however the base prices of 170 products have been increased more than their commensurate prices w.e.f. 15.11.2017 which established that because of the increase in the base prices the cum-tax prices paid by the consumers were not reduced commensurately, despite the reduction in the GST rate. As per the provisions of Sec 171 (1) read with Rule 133 (1) the profiteered amount is determined as ₹ 6,66,700/- as has been computed in Annexure-12 of the DGAP's Report dated 29.01.2020. Accordingly, the Respondent is directed to reduce his prices commensurately in terms of Rule 133 (3) (a) of the above Rules. Further, since the recipients of the benefit, as determined, are not identifiable, the Respondent is directed to deposit an amount of ₹ 6,66,700/- in two equal parts of ₹ 3,33,350/- each in the Central Consumer Welfare Fund and the Maharashtra State Consumer Welfare Fund as per the provisions of Rule 133 (3) (c) of the CGST Rules 2017, along with interest payable @ 18% to be calculated from the dates on which the above amount was realized by the Respondent from his recipients till the date of its deposit. The above amount of ₹ 6,66,700/- shall be deposited, within a period of 3 months from the date of passing of this order failing which it shall be recovered by the concerned CGST/SGST Commissioners. This Authority as per Rule 136 of the CGST Rules 2017 directs the Commissioners of CGST/SGST Maharashtra to monitor this order under the supervision of the DGAP by ensuring that the amount profiteered by the Respondent as ordered by this Authority is deposited in the CWFs of the Central and the Maharashtra State Government. A report in compliance of this order shall be submitted to this Authority by the concerned Commissioner within a period of 4 months from the date of receipt of this order.
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