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2020 (2) TMI 667

..... rate reduction in the price - contravention of Section 171 of the CGST Act 2017 - penalty - HELD THAT:- The allegation of the Applicant No. 1 is that the Respondent had maintained the same selling price in respect of supplies of the said Power Bank before and after coming into force of Notification No. 24/2018-Central Tax (Rate) dated 31.12.2018 and he had not passed on the benefit of reduction in the GST rate to the Applicant No. 1 and other recipients. In this context, we have perused the screenshots of price of the product on the official web portal of the Respondent as on 19.12.2018 and 03.01.2019 and we observe that the said Power Bank was being classified under the HSN 8507 60 00 and supplies of the said Power Bank, described as &ldqu .....

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..... plicant No. 1 had stated in his application that the Respondent had resorted to profiteering in respect of supply of Xiaomi-Ml Power Bank 2i Red (10000 mAh) (hereinafter referred as said Power Bank ). The Applicant No. 1 had also alleged that the Respondent had maintained the same selling price for the said Power Bank despite reduction in the GST rate from 28% to 18% effected vide Notification No. 24/2018-Central Tax (Rate) dated 31.12.2018, which came into force on 01.01.2019 and that the Respondent had not passed on the benefit of this reduction in the GST rate to his recipients by way of commensurate reduction in the price of the Power Bank as envisaged under Section 171 of the CGST Act 2017. The said application was examined by the Stan .....

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..... 9(6) of the CGST Rules, 2017. 3. The Respondent submitted his replies to the notice issued by the DGAP vide letters and e-mails dated 17.04.2019, 24.04.2019, 29.04.2019, 13.05.2019, 20.05.2019 and 01.08.2019. The submissions of the Respondent made before the DGAP can be summed as follows:- a) With regard to rate of tax, the Respondent was charging GST 18% before 01 Jan 2019 and continued to charge GST at 18% after 01 January 2019 for the said Power Bank supplied by him, classifying the same under HSN 8507 60 00. He also submitted that amendments effected vide notification No. 24/2018-Central Tax (Rate) dated 31 December 2018 did not lead to any reduction in the rate of tax applicable to the said Power Bank and accordingly the price of the s .....

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..... ct, 2017. 5. The DGAP has reported that it was evident from the documentary evidence received from the Standing Committee on Anti-profiteering that the price of the said Power Bank as shown in the screenshots had remained the same both before and after 01.01.2019. Further, the Respondent had contended that anti-profiteering provisions could not be applied to the case as there was no reduction in the rate of tax for the said Power Bank in his case. 6. The Respondent submitted a table as reproduced below (Table A) to the DGAP, highlighting the breakup of the price in respect of his supplies of the said Power Bank in the periods before the date, i.e. 01.01.2019, of coming into force of the amendments effected vide Notification No. 24/2018- Cen .....

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..... itiation of Investigation had been issued to the Respondent on the basis of complaint of the Applicant No. 1 that post rate reduction vide Notification No. 24/2018-Central Tax (Rate) dated 31.12.2018 which came into effect on 01.01.2019, MRP of the said Power Bank had remained unchanged, the ambit of the current investigation was limited to determine if the Respondent had not passed on the benefit of reduction in the GST rate on Power Banks, from 28% to 18% w.e.f. 01.01.2019 in terms of Notification No. 24/2018-Central Tax (Rate) dated 31.12.2018 and the scope of investigation did not cover any previous instance of reduction of tax rate including the rate reduction effected vide Notification No. 18/2018-Central Tax (Rate) dated 26.07.2018. .....

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..... T rate to the Applicant No. 1 and other recipients. In this context, we have perused the screenshots of price of the product on the official web portal of the Respondent as on 19.12.2018 and 03.01.2019 and we observe that the said Power Bank was being classified under the HSN 8507 60 00 and supplies of the said Power Bank, described as Lithium-ion Batteries , were being effected in line with entry at S. No. 376AA, of Notification No. 18/2018-Central Tax Rate dated 26.07.2018, whereby the GST being levied @ 18% w.e.f. 26.07.2018. We also observe that the entry after coming into force of Notification No. 24/2018-Central Tax (Rate) had no effect on the tax rate leviable on the said Power Bank, HSN 8507 60 00, being supplied by the Respondent. .....

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