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2020 (4) TMI 571 - NAPA - GSTProfiteering - supply of Dettol HW Liquid Original 900 ml - allegation that respondent had not passed on the benefit of reduction in the GST rate from 28% to 18% and instead, increased the base price of the above product - contravention of section 171 of CGST Act - penalty - HELD THAT:- It is apparent from the DGAP’s Report that there has been reduction in the rate of tax from 28% to 18% w.e.f. 15.11.2017, vide Notification No. 41/2017-Central Tax (Rate) dated 14.11.2017 and the above product was impacted by the rate reduction and hence, the benefit of the rate reduction was required to be passed on to the customers by the Respondents. It is also revealed that the DGAP vide his report dated 19.09.2019 has calculated the amount of net higher sales realization due to increase in the base price of the impacted goods, despite the reduction in the GST rate from 28% to 18% as ₹ 63,14,901/- in respect of the Respondent No. 1 and ₹ 2,33,456/- in respect of the Respondent No. 2. - The said profiteered amount has been arrived at by the DGAP by comparing the actual invoice-wise base price of the complained product sold during the period from 15.11.2017 to 31.03.2019 with the commensurate price based on the average of the base prices of the product sold during the period from 01.11.2017 to 14.11.2017. The profiteered amount is determined as ₹ 63,14,901/- in respect of the Respondent No. 1 and ₹ 2,33,456/- in respect of the Respondent No. 2 in terms of Rule 133 (1) of the CGST Rules, 2017, during the period from 15.11.2017 to 31.03.2019. This Authority under Rule 133 (3) (a) of the CGST Rules, 2017 orders that the Respondent No. 1 & 2 shall reduce their prices commensurately as has been detailed above. The Respondent No. 1 & 2 are also directed to deposit an amount of ₹ 63,14,901/- and ₹ 2,33,456/- respectively in the CWF of the Central and the concerned State Governments, as the recipients are not identifiable, as per the provisions of Rule 133 (3) (c) of the above Rules alongwith 18% interest payable from the dates from which the above amount was realised by them from their recipients till the date of deposit - Since the Respondent No. 2 has made supplies in the NCT of Delhi only the profiteered amount shall be deposited by him in the CWF of the Central Government and the Government of NCT of Delhi respectively, as per the provisions of Rule 133 (3) (o) along with the interest @ 18% within a period of 3 months failing which the same shall be recovered by the concerned Commissioner CGST/SGST as per the provisions of their respective Acts. Penalty - HELD THAT:- It is evident from the above narration of facts that the Respondent No. 1 and 2 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 have thus profiteered as per the explanation attached to Section 171 of the above Act. Therefore, both the Respondents are apparently liable for the imposition of penalty under Section 171 (3A) of the CGST Act, 2017 - Therefore, a show cause notice be issued directing them to explain why the penalty prescribed under the above sub-Section should not be imposed on him.
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