TMI Blog2020 (7) TMI 340X X X X Extracts X X X X X X X X Extracts X X X X ..... iod of 3 months from the date of passing of this order failing which it shall be recovered by the concerned CGST/SGST Commissioners. 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 he has thus resorted to profiteering. Hence, he has committed an offence under section 171 (3A) of the CGST Act, 2017 and therefore he is loable to penal action under the provisions of the section - accordingly, a notice be issued to him directing him to explain why the penalty prescribed under section 171 (3A) of the Act read with Rule 133 (3) (d) of CGST Rules, 2017 should not be imposed on him. - Case No. 36/2020 - - - Dated:- 6-7-2020 - DR. B.N. SHARMA, CHAIRMAN, SH. J.C. CHAUHAN, TECHNICAL MEMBER, SH. AMAND SHAH, TECHNICAL MEMBER, 1. None for the Applicant 2 Sh. Vishal Khandelwal and Sh. Amit Kumar, Authorized Representatives for the Respondent ORDER 1. The present Report dated 27.12.2019 has been furnished by the Director General of Anti-Profiteering (DGAP), under Rule 129 (6) of the Central Goods Services Tax (CGST) Rules, 2017. The brief facts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an Therefore, by doing so, he has passed benefit on the pricing of goods to the extent which covered the loss of denial of ITC w.e,f. 15, 11.2017. b) That he had migrated to a new POS hardware on 12.07.2017 and any data before that was available only in txt format, conversion of which was not possible. c) That there was no closing stock of material remaining as on 14.11.2017 on which ITC was claimed earlier and hence, there wasn t any reversal of credits of ITC on closing stock on 14.11.2017. 4. Vide the aforementioned e-mails/letters, the Respondent submitted the following documents/information:- (a) Copies of GSTR-I and GSTR-3B Returns for the period from July 2017 to June 2019. (b) Sales Details for the period from August, 2017 to June, 2019. (c) Price List of products (pre and post 15.11.2017). (d) Copies Of Electronic Credit Ledger for the period from July 2017 to June 2019. (e) ITC Register for the period from July, 2017 to November, 2017. 5. The DGAP has further reported that in terms of Rule 130 of the CGST Rules 2017, the Respondent had been informed by the DGAP vide notice dated 11.04.2019 that if any information/documents provided by him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 017 to 14.11.2017 with the actual selling prices post rate reduction i.e. w.e.f. 15.11.2017 and found that though the tax amount was computed @ 18% prior to 15.11.2017 and @ 5% w.e.f. 15.11.2017 in respect of 152 items but the Respondent has increased the base prices and the cum-tax prices paid by the consumers and the prices were not reduced commensurately, inspite of the reduction in the GST rate, Therefore, the only remaining point for determination was whether the increase in the base prices was solely on account of the denial of ITC. 9. The DGAP has further submitted that the assessment of the impact of denial of ITC which was an uncontested fact, required determination of the ITC in respect of restaurant service , as a percentage of the taxable turnover from the outward supply of products , made during the pre-rate reduction period. For instance, if the ITC in respect of restaurant service was 10% of the taxable turnover of a registered person till 14.11.2017 (which became unavailable to him w.e.f. 15.11.2017) and if the increase in the base prices w.e.f. 15.11.2017 was less than 10%, then this would not be a case of profiteering. However, if the increase in the base pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... items supplied by the Respondent have been increased by the Respondent, presumably, to offset denial of ITC. The pre and post rate reduction prices of the items sold by the Respondent during the period from 01.07.2017 to 14.11.2017 (Pre-GST rate reduction) and from 15.11.2017 to 30.06.2019 (Post-GST rate reduction) were compared and it was found that the Respondent has increased the base prices of the products supplied by him by more than what was required to offset the impact of denial of ITC in respect of 152 items sold during the same period and hence, the commensurate benefit of reduction in the rate of tax from 18% to 5% has not been passed on. The DGAP has also found that there was no profiteering in respect of the remaining items on which there was either no increase in base prices or the increase in the base prices was less or equal to the denial of ITC or these were new products launched post rate reduction. 12. The DGAP has also stated that only those items. where the increase in the base prices was more than what was required to offset the impact of denial of ITC were considered and the calculation of the profiteered amount was carried out following the above principl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The above Report of the DGAP was considered by this Authority in its sitting held on 31.12.2019 and it was decided to hear the Respondent on 17.01.2019. Sh. Vishal Khandelwal and Sh. Amit Kumar, Authorized representatives, represented the Respondent, 16. The Respondent vide his written submissions dated 13.02.2020 has made the following submissions:- a. Discounted Average Base Rate taken in PGAP Calculation Report : - That the average price during the period from 01.11.2017 to 14.11.2017 has been compared by the DGAP with the actual price post GST rate reduction which was arbitrary and no uniformity had been maintained. All Subway franchisees across India were offering 50% discount on all the products on a single day every year as part of business promotion. The Respondent had offered this scheme on 03.11.2017 however, The DGAP while calculating the average price has considered all the sales including the discounted sales which had been made on 03.11.2017, Due to inclusion of the discount sales in the calculation of the average price, huge difference has come as compared to the actual base price and accordingly the profiteered amount has been wrongly calculated. If the 50% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.83 1597 Nos. INR 26877.51 b. That as per the above calculations. there was a difference of ₹ 26,877.51/- in the profiteered amount due to inclusion of discounted sales while calculating the average price on a single product. c. That it was very common in restaurant business to offer discretionary discounts to the customers and these discounts largely depended on market practices but all discounts were discretionary depending upon the sales, inventory position, competitor strategy, market penetration, customers loyalty or other similar factors. Giving discount was a norm in this competitive world and depended on various factors. It was the right of the business to decide quantum of discount and the period that needed to be given to sustain in the competitive markets and attract more customers. The business was also having right to withdraw the discounts and other promotional offers anytime and there was no rule governing that any deal or discount could not be withdrawn until expiry of the specified time period. The DGAP has completely ignored that the discount was given under special circumstance only and average pric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e other periods. He has also submitted month wise comparison Chat as under:- Month wise comparison chart Profiteering Analysis month-wise Month Total Profiteering Amount Total Amount % of profiteering amount versus total turnover Month Total Profiteering Amount Total Turnover % of profiteering amount versus total turnover Nov 17 73.629.96 617,434.00 11.93% Sept 18 203,764.83 1,742,899.00 11.69% Dec 17 143,750.03 1,235,230.00 11.64% Oct 18 206,096.55 1,781,202.00 11.57% Jan 18 164,515.18 1,415,219.00 11.62% Nov 18 221,920.89 1,913,762.00 11.60% Feb 18 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under Article 19 (I) (g) of the Constitution of India and the right to trade included the right to determine prices which could not be taken away without any explicit authority under the Law. The base sate price of the complained product was not controlled under any legislation or the Essential Commodities Act or the CGST Act and the Rules. Therefore, this form of price control was a violation of Article 19 (1) (g) of the Constitution of India. h. That he had increased his prices after a lapse of a substantial time period of approx. 15 months from the date of rate reduction to meet out the general inflation and other business related expenditure. The DGAP was working like a price controlling authority and there were no guidelines in the statute itself that prescribed the mechanism to be followed by the business for revision of the prices and up to what period prices of products should not be increased. Therefore the profiteered amount should not be calculated on the increased price of the products if price have been increased by him after considerable time gap, considering the legal and settled fact that fixation of prices was fundamental right of the business and there we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9,142.56 1,82,851.20 Sept 18 2,03,764.83 9,703.08 1,94,061.74 Oct 18 2,06,096.55 9,814.12 1,96,282.43 Nov 18 2,21,920,89 10,567.66 2,11,353.23 Dec 18 2,04,524.50 9,739.26 1,94,785.24 Jan 19 2,10,726.67 10,034.60 2,00,692.07 Feb 19 2,47,078.98 11,765.66 2,35,513.32 Mar 19 3,18,995.90 15,190.28 3,03,805.98 Apr 19 3,04,301.53 14,490.54 2,89,810.98 May 19 3,04,779.20 14,513.29 2,90,265.91 June 19 2,87,889.74 13,709.03 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis of net sales. This did not come under the purview of ITC loss. Due to this increase in royalty expenses, impact on profiteered amount was ₹ 4,09,897/- and it should be reduced while calculating the profiteered amount. l. The Respondent has also relied upon the decision of this Authority given in the case of Kumar Gandhrav v. M/s KRBL Limited (Case Number 03/2018 dated 04.05.2018) = 2018 (5) TMI 760 - NATIONAL ANTI-PROFITEERING AUTHORITY wherein increase in the purchase price/cost of goods has been accepted by this Authority while determining the profiteered amount. He has also reproduced relevant Para 7 of the above said Order as under:- It is also revealed from the perusal of the tax Invoices submitted by the Respondent that there was an increase in the purchase price of paddy in the year 2017 as compared to its price during the year 2016 which constitutes major part of the cost of the above product Therefore, due to the imposition of the GST on the above product as well as the increase in the purchase price of the paddy there does not appear to be denial of benefit of ITC as has been alleged by the applicant as there has been no net benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,18,995.90 2,92,551.94 26,443.96 Apr 19 3,04,301.53 2,79,730.22 24,571.31 May 19 3,04,779.20 2,80,464.54 24,314.66 June 19 2,87,889.74 2,64,935.85 22,953.88 41,93,431.44 37,83,534.28 4,09,897.15 m. Increase in delivery expense paid to Online E- Commerce Platforms should be considered in calculation of base price after rate reduction:- That the online aggregators have given a large customer base to the restaurants over and above the already existing dining-out facility. Considering the above benefit the Respondent had started working with the aggregators like Swiggy and Uber Eats etc. from January 2018 onwards and under the service agreement with the aggregators he was paying 12-15% service fee for delivery of the products to them. The Respondent s online sales as compared to his total sales were around ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 663,301.00 82,912.63 14,924.27 Sep 18 1,742,899.00 728,839.90 728,839.00 91,104.88 16,398.88 Oct 18 1,781,202.00 818,518.00 818,518.00 102,269.75 18,405.56 Nov 18 1,913,762.00 772,131.00 772,131.00 96,516.38 17,372.95 Dec 18 1,834,799.00 689,216.00 123,309.00 812,525.00 101,565.63 18,281.81 Jan 19 1,865,386.00 548,058.00 374,883.00 922,941.00 115,367.63 20,766.17 Feb 19 1,705,693.00 525,450.00 295,095.00 820,545.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t only passed the benefits by reduction in the tax rate but had also reduced the basic prices further and incurred substantial losses. The DGAP while calculating profiteered amount, had not considered the prices of products which has been reduced by him and considered the impact on the profiteered amount as zero instead of negative value. However, the column named Difference in Value % in the DGAP working file (File name Total in annexure 14 of DGAP report) clearly showed the negative % for the impacted line items. Total amount of these impacted negative line items was ₹ 2,28,863/- which has been incurred by the Respondent on account of reduction in prices of the products after rate reduction which has not been considered by the DGAP while calculating profiteered amount and therefore, the profiteered amount should be reduced further by ₹ 2,28,863/-. The Respondent has furnished the details of the items in respect of which the base prices have been reduced post 14 th November, 2017 in the Table given below:- Impact on Profiteering amount due to reduction in prices (Amount in Rs.) Month T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (12,442.69) 12,442.69 18,498.52 Aug 18 0.00 (8,152.25) 8152.25 Jun 19 0.00 (12,400.69) 12,400.69 20,552.94 Total 0.00 (40,380.41) 40,380.41 0.00 -1,88,483 1,88,483 2,28,862 o. Benefits passed to the customers where price is zero should be considered appropriately:- That he has incurred total amount of Rs- 2,94749/- on account of items where zero base prices were charged under various kind of sale promotion schemes such as free items to loyal customers etc. The DGAP has not considered these benefits while calculating the profiteered amount as this was also a benefit passed on to the customers. Therefore, the calculated profiteered amount should be reduced further by ₹ 2,94,749/-. The Respondent has furnished the product wise summary as has been mentioned in the Table given below:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ie Delite Sub 13,720.00 13,774.00 12. Chkn Tikka Sub 7,790.00 25 Veggie Patty Sub 3,520.00 11,310.00 13. Cookie 160.00 26 Veg Shammi Sub 24,480.00 24,640.00 168,174.00 126,575.00 294,749.00 p. That he was also providing similar whole order discounts and BOGO (Buy one get one free) offers. q. MRP based product where denial of ITC is much higher in comparison with average ITC:- That he was selling few MRP based products like soft drinks and the GST rate applicable on some of these products was 28% plus 12% Cess. After 14.11.2017. the cost of goods sold had increased because ITC on 28% GST and 12% Cess was not available to him which had been charged by the vendors at the time of purchase. Therefore, the MRP based products where tax incidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ortant products during the 18% GST and then during 5% GST it could be noticed that the final impact to the customer was very minimal and, in some cases, even negative. t. That various petitions were pending in the High Courts in which the petitioners had raised important issues regarding constitutional validity of the anti-profiteering provisions along With computation method/procedures adopted by this Authority for calculating profiteering amount, These included WP (C) 378 of 2019 (Hindustan Unilever Ltd. v. Union of India) = 2019 (5) TMI 562 - DELHI HIGH COURT , WP (C) 2347 of 2019 (Jubilant Food works Ltd. Union of India) = 2019 (5) TMI 568 - DELHI HIGH COURT and WP (C) 4213/2019 (Abbott Healthcare V. Union of India) = 2019 (5) TMI 563 - DELHI HIGH COURT . Hence. the proceeding should be stayed till the time the issue of constitutional validity and computation methodology was settled by the courts. 17. Supplementary Report was sought from the DGAP on the various submissions made by the Respondent. In response, the DGAP has furnished the following reply:- a. Para I;- That the Respondent has not specifically mentioned the discount (50%) in sales data/informa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to appropriate them. Such benefits must go to the consumers and in case they were not identifiable, the amount so collected by the suppliers was required to be deposited in the Consumer Welfare Fund (CWF), The DGAP s investigation has not examined the cost component included in the base price It has only added the denial of ITC to the pre rate reduction base price Hence, Section 171 of the CGST Act, 2017 was neither controlling the prices nor was violative of Article 19 (1) (g) of the Constitution of India. c. Para 3:- That the price included both the base price and the tax charged on it Therefore, any excess amount collected from the recipients, even in the form of tax, must be returned to the recipients. In caser the recipients were not identifiable, the said amount was required to be deposited in the CWF. By increasing the base price, the Respondent has forced his customers/recipients to pay extra tax which they were not liable to pay. Therefore, it was clear that the amount of extra tax (GST) on the increased base prices was an amount paid by the customers/recipients which they were not supposed to pay. If any supplier has charged more tax from the recipients, the af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Section 171 of the CGST Act, 2017 which governed the anti-profiteering provisions under GST, required that in the event of a benefit of ITC or reduction in rate of tax, there must be a commensurate reduction in prices of the goods or services. Such reduction could obviously be in terms of money only, so that the final price payable by a consumer got reduced. The statute did not force the supplier to reduce the price more than the actual required commensurate reduction. There could be many marketing strategies or other promotional schemes which might compel the Respondent to reduce the price of products more than the actual requirement. The Respondent was always at liberty to reduce the prices of his products up to any extent and bear the loss but this loss could not be appropriated with the due benefit of rate reduction available to the recipients or customers of the other products where the prices were not reduced commensurately by the Respondent Hence, profiteering under the provisions of Section 171 of the CGST Act, 2017 was to be quantified on the products where prices were not reduced commensurately. g. Para 7:- That under the provisions of Section 171 of the CGST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere without Jurisdiction and barred by Limitation:- That the Maharashtra State Screening Committee had forwarded the complaint to the Standing Committee on Anti-Profiteering vide its letter dated 21.02.2019 for further action, Hence for the purpose of Rule 128 (1) of the CGST Rules, 2017, the date of receipt of the written complaint by the Standing Committee was 21.02.2019. The Standing Committee had examined and referred the written compliant for investigation by the DGAP in its meeting held on 1505.2019. Therefore, it was very clear that the Standing Committee did not consider the written complaint with the period of limitation prescribed under Rule 128 (1) of the CGST Rules. The Standing Committee could not start investigation under Rule 129 of CGST Rules beyond the period of limitation, In the present case, the limitation for the Standing Committee to examine the online written complaint had expired on 20.04.2019. Hence the investigation of the issue by the Standing Committee was beyond the Statutory period of limitation as prescribed under Rule 128 (1) of CGST Rules. 19. We have carefully considered the all the Reports furnished by the DGAP, the submissions made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axable turnover from the outward supply of the products made during the pre-GST rate reduction period by taking into consideration the period from 01.07.2017 to 31.10.2017 and not up to 14.11.2017, This has been done because there was no reversal of ITC on the closing stock of inputs/input services and capital goods as on 14.11.2017 made by the Respondent as per the provisions of Section 17 of the CGST Act, 2017 read with Rule 42 and 43 of the above Rules, Accordingly, the ratio of ITC to the net taxable turnover has been taken for determining the impact of denial of ITC which was available to the Respondent till 31.10.2017. As per the record ITC amounting to ₹ 3,58,305/- was available to the Respondent during the period from July, 2017 to October, 2017 which was approximately 9.19% of the net taxable turnover of the restaurant service amounting to ₹ 38,98,737/- supplied during the same period. as has been shown in Table- A supra, with effect from 15.11,2017, when the GST rate on restaurant service was reduced from 18% to 5%, the said ITC was not available to the Respondent. 23. It is further revealed from the analysis of the details of item- wise outward taxable sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory position, competitor s strategy, market penetration and customer loyalty (ii) the same customer may not have purchased the same product during the pre and the post rate reduction periods and (iii) a customer may have purchased a particular product during the pre rate reduction period and may not have purchased it in the post rate reduction period or vice versa and (iv) the average base prices computed for a period of 14 days w.e.f. 01.11.2017 to 14.119017 or for the previous months provide highly representative and justifiable comparable average base prices. On the basis of the average pre rate reduction base prices the commensurate base prices have been computed by adding denial of ITC of 9.19% and compared with the invoice wise actual base prices of the products as is evident from Table-B supra. However, the average pre rate reduction base prices were required to be compared with the actual post rate reduction base prices as the benefit is required to be passed on each product to each customer, In case average to average base prices are compared for both the periods, the customers who have purchased the products on the base prices which were more than the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ranchisee was also giving to promote his sales and hence, they cannot be considered while computing the average or the actual base prices. The Respondent has also alleged that 45 items the average base prices have been computed on the basis of September and October, 2017 prices, Since, there were no sales of these items made during the period from 01.11.2017 to 14.11.2017 and the Respondent had sold these products in the post rate reduction period their base prices have been correctly computed on the basis of the above two months to compute the profiteered amount, Therefore, the average base prices have been correctly calculated by the DGAP and all the claims made by the Respondent in this regard are fallacious and cannot be accepted. 27. The Respondent has also contended that the DGAP has considered all the price revisions made after 15.11.2017 as a part of profiteered amount and has ignored the fact that a businessman has right to increase his prices on account of various reasons Other than tax. It is pertinent to mention here that the scope of profiteering, as per Section 171 of the CGST Act, 2017, is confined to the question of whether the benefit accruing on account of rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... added 5% notional amount on account of GST which has been collected from the customers and deposited with the Government of India with the monthly GST returns. This contention of the Respondent is not correct because the provisions of Section 171 (1) and (2) of the CGST Act, 2017 require that the benefit of reduction in the tax rate is to be passed on to the recipients/ customers by way of commensurate reduction in price, which includes both the base price and the tax. The Respondent has not only collected excess base prices from the customers which they were not required to pay due to the reduction in the rate of tax but he has also compelled them to pay additional GST on these excess base prices Which they should not have paid. By doing so, the Respondent has defeated the very objective of both the Central as well as the State Government which aimed to provide the benefit of rate reduction to the general public, The Respondent was legally not required to collect the excess GST and therefore, he has not only violated the provisions of the CGST Act, 2017 but has also acted in contravention of the provisions of Section 171 (I) of the above Act as he has denied the benefit of tax red ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 171 (1) were not applicable as there was no tax reduction. Therefore, the facts of the above case are different from this case and hence, they cannot help the Respondent. 32. The Respondent has also averred that during the period of investigation he has paid Rs, as delivery fee including GST of ₹ 3,06,505/- to the Online E-commerce platforms through which he was selling his products which has not been taken in to account by the DGAP while computing the base prices. In this respect it would be appropriate to mention that the payment of delivery fee including the GST has no connection with the base prices as the Respondent has admitted increase of 45% in his sales due to the use of the E-commerce platforms which has resulted in his earning more profit, Had the Respondent not earned profit on these sales there was no reason for him to pay them service fee. There is also no question of including the hypothetical ITC on the GST which would have been available to the Respondent in the post rate reduction period while calculating the pre rate reduction average base prices as the Respondent was not making supplies through the above platforms during the pre rate reduction peri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses of profiteering as the benefit has to be passed on to each customer which has to be computed on each product. The customers have to be considered as individual beneficiaries and they cannot be compared with dumped goods and netted oft This Authority has also clarified in its various orders that the benefit cannot be computed at the product, service or the entity level as the benefit has to be passed on each supply of goods and services, Hence, the above contentions of the Respondent is not correct as the Respondent cannot insist on applying the above methodology of netting off as has been approved in the above Report of the WTO as it would result in denial of benefit to the customers which would amount to violation of the provisions of Section 171 of the above Act as well as Article 14 of the Constitution. 35. The Respondent has also stated that he has incurred total amount of ₹ 2,94749/- on account of the items where base prices were made zero under various kind of sale promotion schemes such as free items to loyal customers and Buy One Get One (BOGO) offers. In this connection it is mentioned that Section 171 of the CGST Act, 2017 requires passing of the benefit of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eased the base prices of his products immediately w.e.f 15.119017 and had taken no steps to pass on the resultant benefit of tax reduction by commensurate reduction in the prices of his supplies at any point of time till 30.06.2019. In other words, the violation of the provisions of Section 171 Of the CGST Act 2017 has continued unabated in this case and the offence continues till date, The Respondent has not produced any evidence to prove from which date the benefit was passed on by him. The fact that the Respondent has not complied with the law till 30.06.2019 requires that the profiteering is computed for the entire period and hence we do not see any reason to accept this contention Of the Respondent. We further observe that had the Respondent passed on the benefit before 30.06.2019, he would have been investigated only till that date. Therefore, the period of investigation from 1511.2017 to 30.06.2019 has been rightly taken by the DGAP for computation of the profiteered amount, 38. The Respondent has further argued that the CGST Act, 2017 did not prescribe any method of computation by which profiteered amount could be calculated. The above contention Of the Respondent is fri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on or the additional ITC which has become available to a registered person. The legislature has deliberately not used the word equal or equivalent in this Section and used the word Commensurate as it had no intention that it should be used to denote proportionality and adequacy. The benefit of additional ITC would depend on the comparison of the ITC/CENVAT which was available to a builder in the pre-GST period with the ITC available to him in the post GST period we-f. 01.07.2017. Similarly, the benefit of tax reduction would depend upon the pre rate reduction price and quantum of reduction in the rate of tax from the date of its notification. Computation of commensurate reduction in prices is purely a mathematical exercise which is based upon the above parameters and hence it would vary from SKU to SKU or unit to unit or service to service and hence no fixed mathematical methodology can be prescribed to determine the amount of benefit which a supplier is required to pass on to a buyer Similarly, computation of the profiteered amount is also a mathematical exercise which can be done by any person who has elementary knowledge of accounts and mathematics. However, to further expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o deliberately mislead by claiming that he was required to carry out highly complex and exhaustive mathematical computations for passing on the benefit of tax reduction which he could not do in the absence of the procedure framed under the above Act. However, no such elaborate computation was required to be carried out as the Respondent was to maintain the base price of the product which he was charging as on 14.11.2017 and then add 9.19% of the base price on the base price on account of denial of ITC and charge GST @5% w.e.f, 15.11.2017. Instead of doing that he has raised his prices by adding more than 9.19% of the base prices as is evident from Table-B supra. The average base price of the product mentioned in the above Table was ₹ 107.95 which could have been raised to ₹ 117.87 by adding denial of ITC to the extent of 9.19%. After adding GST @ 5% amounting to ₹ 5.89 the Respondent was required to sell it at the commensurate price of ₹ 123.76 w.e.f. 15.11.2017. However, he had sold the above product at ₹ 140/- and hence, he has profiteered to the extent of ₹ 16.24, It is clear from the above that no procedure or elaborate mathematical calculati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmittee on Anti-profiteering vide his letter No F. No. D-22011/AP/12/2017/Pt-5/B35 dated 08.04,2019. The Standing Committee had considered the above complaint in its meeting held on 15.05.2019 and forwarded it to the DGAP for detailed investigation within the period of 2 months as has been prescribed under Rule 128 (1) of the above Rules. Hence, the above contention of the Respondent in incorrect and therefore, it cannot be accepted. 41. The Respondent has further argued that various writ petitions have been filed challenging the orders passed by this Authority. These included WP (C) 378 of 2019 (Hindustan Unilever Ltd. v. Union of India), WP (C) 2347 of 2019 (Jubilant Food works Ltd. v. Union of India) and WP (C) 4213/2019 (Abbott Healthcare v. Union of India) in which the constitutional validity and computation methodology has been challenged and hence, the present proceedings should be kept pending till the above issues are settled. In this context, it would be relevant to mention that the Hon ble High Court of Delhi has not directed this Authority to stop the proceedings in respect of the present case. Therefore, the present proceedings cannot be kept pending as they are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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