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TMI Blog2018 (12) TMI 1002X X X X Extracts X X X X X X X X Extracts X X X X ..... plicant No. 1 alleging that he had purchased one Honda City Car from the above Respondent vide Tax Invoice No. A-Tax/998/17-18 dated 14.10.2017 by paying an amount of Rs. 9,54,234/- on which GST @ 28% and Cess @ 17% was charged, however the benefit of Input Tax Credit (ITC) was not passed on to him by the above Respondent and therefore action should be taken against the Respondent for contravention of the provisions of Section 171 of the CGST Act, 2017. 2. The application was examined by the Standing Committee on Anti-profiteering and on 04.01.2018 it was forwarded to the Director General of Anti-Profiteering (here-in-after referred to as the DGAP) (erstwhile Director General of Safeguards) to initiate an investigation and collect evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the present Report dated 17.09.2018 and intimated that vide e-mail dated 09.05.2018, he had asked the Applicant to submit copy of the Tax Invoice of a Car of similar model sold by the Respondent prior to the coming in to force of the GST w.e.f. 01.07.2017. He has also intimated that the above Applicant vide his e-mail dated 16.05.2018 had furnished copy of the Invoice No. AHM/0609 dated 24.06.2017 which showed that the price charged by the Respondent for a similar Car was Rs. He has further intimated that vide e-mails dated 22.05.2018, 05.06.2018, 07.06.2018, 20.06.2018 and letter dated 04.07.2018, he had asked the Respondent to provide the details of the applicable taxes in respect of the Car of the above model which he had purchased b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore and after coming in to force of the GST along with the applicable duties/taxes/cess as per the tables A, B, C and D given below:- Table A Pre- GST purchase invoice dated 15.04.2017 Pre GST Amount (in Rs.) Rate of Tax Remarks Base Price 6,22,876 Excise Duty 1,49,490.24 24 24% of Base Price Infrastructure Cess 24,915.04 4 4% of Base Price NCCD 6,228.76 1 1% of Base Price Cess 778.595 0.13 0.125% of Base p rice Price After Excise Duty, Infrastructure Cess (IC), NCCD 8,04,288.635 Price After Excise Duty, IC, NCCD CST+Freight + Insurance 10,528 Dealer's Landed Price 814817 VAT 1,22,223 15 15% of Dealer Landed Price Total 9,37,039 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2018. 9. The DGAP has examined the said application, replies of the Respondent and the documents/evidences on record and stated that the main issue for determination was whether the benefit of reduction in rate of tax or the ITC had been passed on by the Respondent to the Applicant by way of commensurate reduction in the price of the Car or not. The DGAP has observed that the profit margin of the Respondent had been reduced from Rs. 28,589/- which he was getting in the pre-GST era to Rs. 16,621/- in the post-GST era. He has also observed that even after taking in to account the trade discounts of Rs. 4,500/- and Rs. 9,000/-, which the Respondent had received for achieving pre-defined purchase and sale targets for the pre-GST and post-GST t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting to Rs. to the Applicant as he was eligible to claim ITC of the said amount. The DGAP in his report has also concluded that there was increase in the ITC available to the Respondent in the post-GST era as compared to the pre-GST era and the pre-GST and post-GST sale invoices issued by the Respondent revealed that the base price charged from the above Applicant was reduced as the benefit of ITC had been passed on by the Respondent to the Applicant No. 1. Therefore, he has maintained that the allegation that the above Applicant had not been given the benefit of ITC by the Respondent was not proved. 10. Investigation Report received from the DGAP was considered in the meeting of the Authority held on 26th September, 2018 and it was decide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nge in tax rate is not sustainable. It is also revealed from the perusal of the record that the profit margin of the Respondent had got reduced from Rs. 28,589/- which he was receiving in the pre-GST period to Rs. 16,621/- in the post-GST period and after taking in to account the discounts of Rs. 4,500/- and Rs. 9,000/-, which the Respondent had received for achieving predefined purchase and sale targets for the above two periods the total post-GST profit margin of the Respondent was Rs. 25,621/- (Rs. 16,621/- + Rs. 9,000/-), which was less than the pre-GST profit margin of Rs. 33,089/- (Rs. 28,589/- + Rs. 4,500/-). It is also apparent that the reduced profit margin was due to the fact that the post-GST purchase price of the Respondent was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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