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2019 (5) TMI 783

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..... has deliberately and consciously acted in contravention of the provisions of the CGST Act, 2017 by issuing incorrect invoices which is an offence under Section 122 (1) (i) of the above Act and hence he is liable for imposition of penalty under the above Section read with Rule 133 (3) (d) of the CGST Rules, 2017 - In the interest of natural justice before imposition of penalty a notice be issued to him asking him to explain why penalty should not be imposed on him. Application disposed off. - Case No. 31/2019 - Dated:- 10-5-2019 - SH. B. N. SHARMA, CHAIRMAN, SH. J. C. CHAUHAN, TECHNICAL MEMBER, MS. R. BHAGYADEVI, TECHNICAL MEMBER, SH. AMAND SHAH, TECHNICAL MEMBER Present:- Sh. Mansur M.I., Deputy Commissioner, SGST, Kerala for the Applicant No. 1. She Rana Ashok Rajneesh, Assistant Commissioner for the Applicant No. 2. Ms. Nidhi Dhamija and Sh. Sumesh, Authorised Representives, for the Respondent ORDER 1. The present Report dated 05.12.2018 has been received from the Applicant No. 2 i.e. the Director General of Anti-Profiteering (DGAP) under Rule 129 (6) of the Central Goods & Service Tax (CGST) Rules, 2017. The facts of the case are that the Kerala State Screening Committee on .....

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..... benefits in respect of his supplies. The Respondent also submitted that along with other suppliers of luggage items he had represented before the Government of India seeking reduction in the GST rate as the tax burden on the industry had increased in the post-GST era as compared to the pre GST era. The Respondent further stated that he had not increased the prices of his products post implementation of GST, since he was hopeful of a reduction in the tax rate and that the reduction in GST rate from 28% to 18%, which came into effect from 15.11.2017, had only corrected the excessive tax burden which was being borne by him. The Respondent also submitted relevant documents, viz. invoice-wise details of outward taxable supplies of the products under investigation, covering the period from October, 2017 to August, 2018 and price lists of the products under investigation (pre and post 15.11.2017) as also his GSTR-1 and GSTR-3B returns for the period July, 2017 to August, 2018. 5. In this Report, the DGAP has reported that investigation was conducted to ascertain as to whether the benefit of such reduction in the rate of tax had been passed on by the Respondent to his recipients as mandate .....

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..... written submissions vide his letter dated 01.01.2019 via post wherein he averred that he was a distributor engaged in business of trading of luggage and travel goods , falling under Chapter 4202. The said goods were leviable to taxes @ 18% in the pre GST era, whereas the GST rate fixed thereon was 28% with effect from 1 July, 2017, which was later reduced to 18% on 15th November, 2017 on account of representations by the trade. The Respondent has contended that in the period after 01.07.2017, when the rate of tax was increased to 28%, he had not increased the prices of the products and had absorbed the additional cost arising on account of implementation of GST. The Respondent further averred that the reduction in the GST rate w.e.f 15.11.2017 from 28% to 18%, had only corrected the excessive tax burden which was borne by him since 01.07 2017 due to GST implementation and that reduction of tax rate was merely a corrector w.e.f 15.11.2017 and thus the question of passing on the benefit of this tax rate change to the recipients did not arise. He added that the said reduction in rate of tax would not entail any commensurate reduction in pricing of the said products. He further submitt .....

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..... nd that the Respondent has acted in contravention of the provisions of Section 171 of the CGST Act, 2017 in as much as he did not pass on the benefit of reduction in the rate of tax to his recipients by way of commensurate reduction in the prices. It is pertinent to note that the amount of profiteering determined by the Applicant No. 2 works out as ₹ 18,887/- as follows: Goods/Services Description HSN Base price per unit pre 15.11.2017 base price per unit post 15.11.2017 Qty sold after 15.11.2017 Rate of GST Actual Selling price per unit Commensurate price Profiteering per unit Profiteering A B C D E F G-118% of D H=118% of C I=G-H J=I*E Tropic 45 Weekender black 42021250 ₹ 2160.16 ₹ 2343.22 22 18% ₹ 2765.00 ₹ 2548.99 ₹ 216.01 ₹ 4752 Tropic 45 Weekender black 42021250 ₹ 2160.16 ₹ 2403.31 48 18% ₹ 2835.91 ₹ 2548.99 ₹ 286.92 ₹ 13772 Neolite Strolly 53360 VIP FIR 42021220 ₹ 1864.26 ₹ 2022.25 1 18% ₹ 2386.26 ₹ 2199.83 ₹ 186.43 ₹ 186 Neolite Strolly 53360 VIP FIR 42021220 ₹ 1864.26 Rs. 939.31 2 18% ₹ 2288.39 ₹ 2199.83 ₹ 88.56 ₹ 177 Total ₹ .....

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