TMI Blog2018 (10) TMI 510X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, there is no doubt that the benefit of reduction in the GST rate was not passed on to the recipients by way of commensurate reduction in the price charged by the Respondent which amounts to violation of the provisions of Section 171 of the above Act. It is also apparent from the facts of the case that the Respondent had no legal sanction to increase the base price of the product on his own and what was required of him was that he should have only reduced the MRP of the product by taking in to accout the effect of the reduction in the rate of tax. The Respondent was further required to fix the MRP keeping in view the provisions of the Legal Metrology (Packaged Commodities) Rules, 2011 which prescribe the methodology of fixining the MRP keeping in view the rounding off the price. Respondent has contended that he had passed on the benefit in respect of the product by way of reducing the MRP of the 70 Gms. products - Held that:- The Respondent has no such liberty to arbitrarily decide in respect of which products he would pass on the benefit and in respect of which products he would not pass such benefit. As per the provisions of Section 171 of the Act the benefit has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove Applicant had also alleged that prior to 15.11.2017, the Respondent was charging 18% GST on the product s base price of ₹ 3.96/- per pack, however, after the GST rate was reduced from 18% to 12% w.e.f. 15.11.2017, the Respondent had started charging 12% GST on the product s increased base price of ₹ 4.17/- per pack. Thus, the Applicant No. 1 had further alleged that the Respondent had increased the base price of the product from ₹ 3.96/- to ₹ 4.17/- after the GST rate applicable on the product was reduced from 18% to 12%. The Applicant had also claimed that by increasing the base price of the product it s cum-tax price had remained unchanged at ₹ 4.67/- which showed that the Respondent had not passed on the benefit of the reduction of GST rate to him. The application was examined by the Standing Committee on Anti-Profiteering in it s meeting held on 20.12.2017, wherein it was decided to refer the matter to the Director General of Safeguards (DGSG), now re-designated as Director General Anti-Profiteering (DGAP) in order to initiate an investigation and collect evidence necessary to determine whether the benefit of reduction in the rate of tax on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on for the retailer would have been approximately 56 paise against which the respondent had reduced the price by 92 paise with reduced MRP of ₹ 11/- and thus, the benefit in respect of ₹ 5/- MRP pack had been passed on by reducing the price of other packs of Maggi Noodles by more than what was required. Therefore, the Respondent had claimed that the benefit of GST rate reduction had been passed on in respect of Maggie Noodles as a whole. The Respondent had also submitted the following documents: - a) Balance Sheet, Profit and Loss Account for the year 2016-17. b) Copies of the GSTR- 3B returns for the period from October, 2017 to February, 2018. c) Copies of the GSTR-1 returns for the period from October, 2017 to February, 2018. d) GST TRAN 1 for July, 2017 e) Purchase invoices for the period from November, 2017 to March, 2018 f) Sales calculation sheet for the month of November, 2017. g) Sample sales invoices for the month of November, 2017. h) Price lists before 15.11.2017 and w.e.f. 15.11.2017. 4. The DGAP has analysed the application, the reply of the Respondent and the documents/evidence brought on record and has a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such a proposition would work against the recipients of the product and the law did not provide for such adjustments. Therefore, the DGAP has concluded that the Respondent has not passed on the benefit of GST rate reduction to the recipients of the product including the Applicant No. 1. Accordingly, the DGAP has calculated the profiteered amount of ₹ 90,778/- including the profiteered amount of ₹ 2,253/- charged by the Respondent from the Applicant No.1 as has been shown below:- (Amount in Rs.) Sr.No. Product MRP 1st Nov. to 14th Nov. 2017 15th Nov. 2017 to 28th Feb. 2018 Commensurate Price per unit Profiteering Per unit Total Profiteering Amount Charged Base Price GST Rate Qty. Sold Amount Charged Base Price GST Rate Qty. Sold A B C D E F G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en by the Respondent shows that he has stated that he had already filed his submissions before the DGAP and had also submitted the necessary information/documents before him and there were no additional submissions that were intended to be submitted over and above the one submitted earlier before the DGAP and his case should be decided keeping in view his earlier submissions. The Respondent has re-iterated that he had not profiteered and duly passed on the benefits which had accrued on account of GST rate reduction effective from 15.11.2018. He has further stated that the Applicant No.1 had already withdrawn his complaint and hence the present proceedings should be dropped. 8. We have carefully examined the DGAP s Report, the written submissions of both the Applicants and the Respondent placed on record and find the following issues are to be settled in the present proceedings:- 1) Whether the benefit accrued due to reduction in the rate of tax of one product can be passed on via another product or not? 2) Whether there was any violation of the provisions of Section 171 of the CGST Act, 2017 in this case? 3) If yes then what was the quantum of profiteering? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MRP arbitrarily. It was for the customers to furnish the required legal tenders and therefore, the Respondent can not be allowed to resort to profiteering. The Ministry of Consumer Affairs has alredy issued detailed instructions vide it s Notification dated 16.11.2017 for notifying the reduced MRP which have not been followed by the above Respondent. 12. It is further apparent from the record that the Respondent has contended that he had passed on the benefit in respect of the product by way of reducing the MRP of the 70 Gms. products. The Respondent has no such liberty to arbitrarily decide in respect of which products he would pass on the benefit and in respect of which products he would not pass such benefit. As per the provisions of Section 171 of the Act the benefit has to be passed on to each recipient and the same can not be selectively granted or denied. It is also clear that the Maggi Noodle pack of 35 Gms. is distinct from a 70 Gms. pack and both the packs may be bought by the different recipients/customers and hence the benefit accruing to one customer can not be given or denied to another nor can the benefit given to one set of customers arbitrarily enhanced and set ..... X X X X Extracts X X X X X X X X Extracts X X X X
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