Home Case Index All Cases GST GST + NAPA GST - 2019 (11) TMI NAPA This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (11) TMI 1084 - NAPA - GSTProfiteering - Sanitary Napkin - reduction in the rate of GST - benefit of Input Tax Credit (ITC) to him by way of commensurate reduction in the price not passed on - contravention of section 171 of CGST Act - penalty - HELD THAT:- The respondent had not disputed the fact that the denial of ITC based on the turnover arrived at the DGAP was 9.4% - on perusal of the invoices on the basis of which complaint has been made clearly shows that the base price has increased even though the MRP remained the same. It is established beyond any doubt that the Respondent No. 1 (manufacturer) had increased the base price w.e.f. 27.07.2019 more than what he was entitled to increase, which clearly shows that he had deliberately in conscious disregard of the provisions of Section 171 of the above Act had resorted to profiteering. - the profiteered amount by the Respondent No.1 is determined as ₹ 42,70,18,5811- as per the provisions of Rule 133 (1) of the CGST Rules, 2017 as the said Respondent has failed to pass on the benefit of rate reduction to his customers. The respondent no. 2 who is the seller of the product has clearly increased the base price of the product. But as the benefit of ITC was not available to him post 27.07.2018, so the reversal of ITC on the closing stock was extra cost to him - as seen from the records reversal of ITC by him is more than excess realisation on closing stock after deniel of ITC benefit w.e.f. 27.07.2018, therefore no profiteering can be concluded on his part and hence, section 171(1) does not hold good in respect of the respondent. - This authority accepts the report of DGAP and holds that anti-profiteering provisions contained in section 171(1) of CGST Act is not attracted in case of Respondent no. 2 (who is seller) Penalty - HELD THAT:- It is also evident from the above narration of facts that the Respondent has denied benefit of rate reduction to the buyers of the product “Sanitary Napkin” in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and has thus resorted to profiteering, which is an offence under section 171 (3A) of the CGST Act, 2017 and therefore, he will be apparently liable for imposition of penalty under the provisions of the above Section - Accordingly, a Show Cause Notice be issued to him directing him to explain why the penalty prescribed under Section 171 (3A) of the above Act read with Rule 133 (3) (d) of the CGST Rules, 2017 should not be imposed on him.
|