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2022 (5) TMI 631 - NAPA - GSTProfiteering - supply of Monitors and TVs of screen size upto 32 inches - benefit of reduction in GST rate was not passed on to the recipients by way of commensurate reduction in the price - contravention of Section 171 of the CGST Act, 2017 - levy of interest and penalty - time limitation - HELD THAT:- A plain reading of Section 171 (1) of the CGST Act, 2017 indicates that it deals with two situation:- 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 28% to 18% on “Monitors and TVs of screen size upto 32 inches” w.e.f. 01.01,2019, vide Notification No. 24/2018-C.T.(Rate) dated 31.12.2018. Therefore, the Respondent is liable to pass on the benefit of the above tax rate reduction to his customers in terms of Section 171 (1) of the above Act, It is also apparent that the DGAP has carried out the present investigation w.e.f. 01.01.2019 to 30.06.2019. It is also evident that for computing the profiteered amount the DGAP has calculated item-wise profiteering during the pre rate reduction period and calculated the average base price (without GST) of particular item by dividing the total taxable value with the total quantity of that item sold. He has compared the average pre rate reduction base price of the item with the actual selling prices of that item sold during the post reduction period i.e. after 01.01.2019 and assessed the profiteered amount on particular item. The mathematical methodology employed by the DGAP to compute the profiteered amount is correct, appropriate, reasonable and in consonance with the provisions of Section 171 (1) and the same has not been challenged by the Respondent in any of his submissions. Further, the Respondent has not submitted any argument against the charges framed in the DGAP's Report. Therefore there are no basis to differ from the findings of the DGAP that the Respondent had indeed contravened the provisions of Section 171 of the CGST Act 2017 - the profiteered amount is determined as Rs. 4,699/- for the period from 01.01.2019 to 30.06.2019 as mentioned in the DGAP's Report dated 28.02.2020 as per the provisions of Section 171 (1) read with Rule 133 (1) of the CGST Rules, 2017. Further, since the recipients to whom the benefit of rate reduction as determined above is required to be passed on, are not identifiable, the Respondent has deposited the profiteered amount of Rs. 4,699/- along with interest of Rs. 1,500/- in the CWFs of the Central and the State Government. Levy of interest - HELD THAT:- It is revealed from the submissions of the Respondent that the Respondent has voluntarily paid the interest amount of Rs. 1500/-. However, the same has not been verified by the DGAP. Accordingly, the DGAP is directed to ensure that the interest, at the applicable rate, is paid by the Respondent and submit his report confirming payment of the interest within three months of this Order. Penalty - HELD THAT:- The Respondent has contravened the provisions of Section 171 (1) of the CGST Act, 2017. However, since, the penalty prescribed under Section 171 (3A) of the CGST Act, 2017 for violation of the above provisions has come in to force w.e.f. 01.01.2020 and the infringement pertains to the period from 01.01.2019 to 30.06.2019 and the Respondent has also deposited the profiteered amount along with the interest therefore, no penalty is proposed to be imposed on the Respondent. Time limitation - HELD THAT:- This Order having been passed today falls within the limitation prescribed under Rule 133 (1) of the CGST Rules, 2017. Application disposed off.
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