TMI Blog2020 (6) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... , with the actual invoice-wise base prices of such goods/products sold by the Respondent during the period from 15.11.2017 to 31.03.2019. The profiteered amount is determined as ₹ 8,50,442/- (inclusive of the GST) as per the provisions of Rule 133 (1) of the above Rules as has been computed vide Annexure-25 of the Report dated 24.09.2019. Accordingly, the Respondent is directed to reduce his prices commensurately in terms of Rule 133 (3) (a) of the above Rules. The Respondent is also directed to deposit an amount of ₹ 8,50,442/- in the Consumer Welfare Fund of the Central and the Delhi State Governments, where the Respondent has made his supplies, 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 the Respondent from his recipients till the date of its deposit. Penalty - HELD THAT:- The Respondent has denied the benefit of tax reduction to the customers in contravention of the provisions of Section 171(1) of the CGST Act, 2017 and has thus profiteered as per the explanation attached to Section 171 of the Act. Therefore, he i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k to provide copies of the above POs which he submitted vide his letter dated 24.05.2019. The DGAP has stated that the said POs had shown that the impugned good Fogg Deo Fougere BX 150 ml was supplied to M/s. Big Bazaar by the Respondent, on 02.12.2017, under PO number 8115259654 with the base price of ₹ 190.04/-, on 04.11.2017, under PO number 8114996814 with the base price of ₹ 175.19/- and on 05.05.2018, under PO number 4517361778 with the base price of ₹ 173.14/-. 4. The DGAP therefore, initiated proceedings against the Respondent and included him as a co-noticee on 06.06.2019 in the already issued notice dated 10.04.2019, for collecting evidence necessary to determine whether the benefit of reduction in the rate of GST from 28% to 18%, had been passed on by M/s. Vini Cosmetics Pvt. Ltd. and the Respondent to their recipients in respect of supply of all the products impacted by such GST rate reduction w.e.f. 15.11.2017, by way of commensurate reduction in prices, in terms of Section 171 of the Central Goods and Services Tax Act, 2017. 5. The time period of the present investigation was w.e.f. 15.11.2017 to 31.03.2019. The DGAP sought extension of the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e. Fogg Deo Fougere BX 150 ml , the MRP of ₹ 299/- in the pre-reduction period was revised to ₹ 275/-, whereas the commensurate reduction required that the revised MRP should have been ₹ 275.64 (₹ 299*1.18/1.28). Thus he had complied with the antiprofiteering provisions. e) In respect of the stock that had already been supplied to the recipients/stockists/super stockists in the further supply chain but not yet sold to the final consumers till 15th of November, 2017, reduction in the price was communicated to all the super stockists through electronic mail, copies of which had been furnished before the DGAP to prove his intention to pass on the benefits to the end user/actual consumer. f) That he had also forwarded stickers with the reduced MRPs to his super stockists/stockists/distributors for being affixed on the impacted goods which had remained unsold to the end users/final consumers as on 15th November, 2017. He had also furnished copy of the invoice of the vendor who had supplied the new MRP stickers to him as also all the correspondence he had made with his super stockists/stockists/distributors. g) That his above submissions shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecific product for a specific party was fixed. The DGAP has further stated that from the documents submitted by M/s. Vini Cosmetics Pvt. Ltd., it was evident that he had reduced the MRP of the product from ₹ 299/- to ₹ 275/- w.e.f. 15.11.2017. The DGAP has produced the following invoices to establish this fact:- Product Name : FOGG FRESH FOUGERE 125 GMS Customer Name : SMART MART Pre Rate change Post Rate change Invoice No. DNH0000556 DNH0000629 Invoice date 08/11/2017 29/11/2017 Base Price 153.8 153.44 MRP 299 275 Product Name : FOGG FRESH FOUGERE 125 GMS Customer Name : TRINISHA ENTERPRISE Pre Rate change Post Rate change Invoice No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pport of which M/s. Vini Cosmetics Pvt. Ltd. had furnished the copy of the invoice of the vendor who had supplied the new/revised MRP stickers to him. The purpose of these new MRP stickers was that they had to be affixed by the super stockists/distributors etc. on the impacted products. The DGAP has further stated that since these goods had already been supplied by M/s. Vini Cosmetics Pvt. Ltd. to his super stockists, over whom M/s. Vini Cosmetics Pvt. Ltd. did not have any control. The DGAP further stated that the question of whether all the super-stockists had further passed on the benefit to the end users/final consumers was outside the scope of the present investigation and thus had not been examined. 13. In respect of the Respondent, the DGAP has reported that perusal of the outward sales data made available by the Respondent indicated that the Respondent had increased the base prices of the impugned product Fogg Deo Fougere BX 150 ml while the rate of GST was reduced from 28% to 18% w.e.f. 15.11.2017, for some time. The Respondent contended that he had to supply the goods based on the PO issued by the buyers, and MRPs for the products as well as purchase prices were alre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 01.11.2017 to 14.11.2017 (A) 175.19/- Post-rate reduction base selling price during (B) 190.04/-(00003169 dated 16.11.2017) Commensurate Price (C=A x 1.18) 206.73/- Post-rate reduction selling price (Invoice No. and Date) (D=B x 1.18) 224.25/- (00003169 dated 16.11.2017) Profiteering (E=D-C) 17.52/- 16. The DGAP has thus concluded that the amount of net higher sales realization on account of the increase in the base price of the product, despite the reduction in the GST rate from 28% to 18%, came to ₹ 8,50,442/- inclusive of the excess GST so collected by the Respondent from Recipient. 17. After perusal of the DGAP s Report, this Authority in its meeting held on 25.09.2019 decided to hear the Applicants and the Respondent on 22.10.2019 and accordingly notice was issued to all the interested parties. A Notice was also issued to the Respondent on 26.09.2019 asking him to reply why the Report dated 24.09.2019 furnished by the DGAP should not be accepted and why his li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent during the period from 15.11.2017 to 31.03.2019. 21. We also observe from the invoices issued by M/s. Vini Cosmetics Pvt. Ltd. to his super-stockists, as referred by the DGAP in the table in the Table mentioned in the preceding paragraph show that M/s. Vini Cosmetics Pvt. Ltd. had indeed commensurately reduced the MRPs of the products supplied by him consequent upon the tax rate reduction w.e.f. 15.11.2017. But the Respondent as is evident from his invoices provided by the DGAP had not passed on the benefit of rate reduction to his recipients and this fact has also been accepted by the Respondent. 22. Based on the above facts the profiteered amount is determined as ₹ 8,50,442/- (inclusive of the GST) as per the provisions of Rule 133 (1) of the above Rules as has been computed vide Annexure-25 of the Report dated 24.09.2019. Accordingly, the Respondent is directed to reduce his prices commensurately in terms of Rule 133 (3) (a) of the above Rules. The Respondent is also directed to deposit an amount of ₹ 8,50,442/- in the Consumer Welfare Fund of the Central and the Delhi State Governments, where the Respondent has made his supplies, as the recipients a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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