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2019 (12) TMI 510 - NAPA - GSTProfiteering - supply of the product, namely, “Washing Machine (Elena Aqua VX)” - benefit of reduction in the rate of tax on the impugned product not passed on - contravention of provisions of section 171 of CGST Act or not - penalty. Whether there was a reduction in the rate of tax on the product post introduction of GST w.e.f. 01.07.2017 and if so, whether the benefit of such reduction in the rate of tax had been passed on by the Respondent to the recipients, in terms of Section 171 of the Central Goods and Services Tax Act, 2017? HELD THAT:- it is established that the Respondent has acted in contravention of the provisions of Section 171 of the CGST Act, 2017 and has not passed on the benefit of reduction in the rate of tax to his recipients by commensurate reduction in the prices. Accordingly, the amount of profiteering is determined as ₹ 67,28,592/- as per the provisions of Rule 133 (1) of the CGST Rules, 2017. The Respondent is therefore directed to reduce the prices of his products as per the provisions of Rule 133 (3) (a) of the CGST Rules, 2017, keeping in view the reduction in the rate of tax so that the benefit is passed on to the recipients, The Respondent is also directed to deposit the profiteered amount of Rs, 67, 28,592/- along with the interest to be calculated @ 18% from the date when the above amount was collected by him from the recipients till the above amount is deposited in terms of the Rule 133 (3) (b) of the CGST Rules, 2017. Since, the present investigation is to the issue of not passing on the benefit of reduction in the rate of tax by the Respondent has been conducted w.e.f. 01.07.2017 to 31.08.2018, the Authority, as per the Rule 133 (5) (a) of the CGST Rules, 2017, directs the DGAP to investigate quantum of profiteering on all the products including the present product which the Respondent is supplying for violation of the provisions of Section 171 of the CGST Act, 2017 and submit his Report as per the provisions of Rule 133 (5) (b) of the CGST Rules, 2017. Penalty - HELD THAT:- The Respondent has denied the benefit rate reduction of the GST to the consumers in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and has thus resorted to profiteering. Hence, he has committed an offence under Section 171 (3A) of the CGST Act, 2017 and therefore, he is apparently liable for imposition of penalty under the provisions of the above Section - thus, a SCN 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.
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