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2022 (9) TMI 252 - NAPA - GSTProfiteering - supply of three products - Juvederm Voluma with Licodaine - Juvederm Ultra Plus XC - Juvederm Ultra - benefit of reduction in the GST rate from 28% to 18% was not passed on to the recipients, by way of commensurate reduction in the price - contravention of section 171 of CGST Act - HELD THAT:- Every recipient of goods or services is entitled to the benefit of tax rate reduction by way of reduced prices and Section 171 does not offer the Respondent to suo-moto decide on any other modality to pass on the benefit of reduction in the rate of tax to his recipients. Therefore, any benefit of tax rate reduction passed on to a particular recipient or customer cannot be appropriated or adjusted against the benefit of tax rate reduction due to another recipient or customer. Hence, this methodology of 'netting off' cannot be applied in the present case as the customers have to be considered as individual beneficiaries and they cannot be compared with netted off. This Authority has also clarified in its various orders that the benefit cannot be computed at the product, service or the entity level as the benefit has to be passed on each supply of goods and services. This Authority determines that the amount profiteered by the Respondent No. 1 and No. 2 is Rs. 61,54,833/- and Rs. 28,50,72,358/- respectively. The amount profiteered by the Respondent No. 2 is inclusive of the amount profiteered by the Respondent No. 1. Hence, the Respondent No. 2 is liable to pass on the profiteered amount of Rs. 61,54,833/- to the Respondent No. 1 and thus, the Respondent No. 1 is liable to pass on this benefit of rate reduction due to the Applicant No. 1 and the remaining amount in the Central and concerned State Consumer Welfare Fund. Further, since the recipients (other than the Respondent No. 1) of the benefit of rate reduction are not identifiable, the Respondent No. 2 is directed to deposit the remaining profiteered amount of Rs. 27,89,17,525/- in two equal parts in the Central Consumer Welfare Fund and the concerned 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 No. 2 from his recipients till the date of its deposit as prescribed and in accordance with the provisions of Rule 133 (3)(b) of the CGST Rules, 2017. The above amount of Rs. 27,89,17,525/- 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. Penalty - HELD THAT:- It is evident from the narration of facts that the Respondents have denied the benefit of tax reduction to the customers in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and he has thus resorted to profiteering. Hence, they have, committed an offence under section 171 (3A) of the CGST Act, 2017 and therefore, they are liable to penal action under the provisions of the above Section. However, since the provisions of Section 171 (3A) come have come into force w.e.f. 01.01.2020, whereas, the period during which violation has occurred is w.e.f 01.07.2017 to 30.09.2019, hence the penalty prescribed under the above Section cannot be imposed on the Respondents retrospectively. This Order having been passed today falls within the limitation prescribed under Rule 133(1) of the CGST Rules, 2017.
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