TMI Blog2022 (8) TMI 530X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest payable @ 18% to be calculated from the dates on which the above amount was realized by the Respondent from, his recipients till the date of its deposit in the said fund. The Respondent is also directed to whim/pass on the benefit of Rs. 1.78 along with interest @18% as prescribed to the Applicant. Penalty - HELD THAT:- The Respondent has denied the benefit of exemption of GST w.e.f. 27.07.2018 on Sanitary, Napkins Section to the customers in-contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and he has thus committed an offence Under Section 171 (3A) of the Act and therefore, he is liable for imposition of penalty under the provisions of the above Section. Section 171 (3A) of the CGST Act, 2017 has been inserted in the CGST Act, 2017 vide Section 112 of the Finance Act, 2019, and the same became operational w.e.f. 01.01.2020. As the period of investigation was 27.07.2018 to 31.10.2020, therefore, the Respondent is liable for imposition of penalty under the provisions of the above Section. Accordingly, notice be issued to him to explain why penalty as prescribed under Section 171 (3A) should not be imposed him. This Order having been passed tod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e investigation between 30.11.2020 and 01.12.2020. The Respondent had not availed the said opportunity. The Applicant No. 1 was also given opportunity to inspect the non-confidential documents/reply furnished by the Respondent on 26.03.2021, which was not availed by the Applicant No. 1. The Applicant No. 1 requested vide email dated 21.04.2021 for another opportunity or inspection, hence the Applicant No. 1 was again granted an opportunity to inspect the Respondent s non-confidential documents on 18.06.2021. However, the Applicant did not avail of this opportunity as well. iii. The period covered by the current investigation was from 27.07.2018 to 31.10.2020. iv. The time limit to complete the investigation was 14.04.2021. However, due to force majeure caused in the light of COVID-19 pandemic, the investigation could not be completed on or before the above date. As per Hon ble Supreme Court Orders in. Suo-Moto Writ Petition (Civil) No. 3 of 2020 in cases where the limitation for any suit, appeal, application or proceeding had expired during the period between 13.03.2020 till 14.03.2021, notwithstanding the actual balance period of limitation remaining, all persons shall h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the following documents/information (a) Drug License No. UP16200000126 and first sale w.e.f. 12.10.2018. (b) Price List of Sanitary Napkin products (pre and post 26.07.2018). (c) Sales invoices Post notification with no GST on Sanitary Napkins. (d) GSTR-3B returns for the period from July, 2017 to October, 2020 and GSTR-1 returns for the period from July, 2018 to October, 2020: (e) Invoice-wise details of all outward supplies of Sanitary Napkin from July, 2018 to October, 2020. (f) Closing stock all Sanitary Napkin as on 27.07.2018. (g) Sample copy of invoices. vii. In the Notice dated 09.11.2020, the Respondent was informed that if any information/documents were provided on confidential basis, in terms of Rule 130 of the Rules, a non-confidential summary of such information/documents was required to be furnished. The Respondent vide email dated 20.03.2021 claimed confidentiality of all information provided to the DGAP except Price list, of Sanitary Napkins (Pre and Post 27.07.2018) and details of outward supplies of Sanitary Napkins during the period July 2018 to October 2020. viii. the subject. application the various replies of the Respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ST Act, 2017, and therefore remedial measures as prescribed under the CGST Act, 2017 should have been taken recourse to before the appropriate authority. xii. The Respondent was asked to provide purchase and sales prices of all the sanitary napkins during pre and post rate reduction period. The Respondent was also requested to provide the sales data of all the outward supplies of the Sanitary Napkins made from July 2018 onwards. The Respondent provided the same vide email dated 14.04.2021. The Respondent also informed that he was left with only 2 quantities of Stayfree Advanced XL 1*14 Sanitary Napkins as closing stock on 27.07.2018 which he sold by charging 12% GST even after rate reduction. On the basis of the purchase and sales price, the profit margin for pre and post rare reduction had been arrived at and the same had been considered for computation of profiteering. xiii. Now, the issue that remains was the determination and quantification of profiteering by the Respondent for tailing to pass on the benefit of the exemption, of GST on the Sanitary Napkins to the recipients, in terms of Section 171 of the CGST Act. 2017. From the sales data made available, it appears ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : Invoice No. A 589 Invoice date B 07.04.2020 Item Name C WHISPER GREEN XL NORMAL 1*30 Quantity D 02 Units Rate per unit E Rs. 260/- GST Charged F Rs. Nil @ 0% Total Exempted Supply G=E*2 520/- Pre Rate Reduction Purchase Price per unit (incl. of GST) H Rs. 250.43/- Pre Rate Reduction Sale Price per Unit (incl GST) I Rs. 270/- Pre Rate Reduction Sale Price per Unit (Excl. of GST) J=H/1.12 223.60 Pre Rate Reduction Sale Price per Unit (Excl. of GST) K=I/1.12 241.07 Profit margin L=K-J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nefit was to be passed on. However, the Applicant No. 1 did not submit any submissions against the DGAP s report. 4. The proceedings in the mutter could not be completed by the Authority due to lack of required quorum of Members in the Authority during the period. 29.04.2021 till 23.02.2022 and the minimum quorum was restored only w.e.f. 23.02.2022. The matter was taken up for hitter proceedings vide Order dated 25.02.2022. 5. This Authority has carefully considered the Reports of the DGAP, submissions made by the Respondent and the case record. It is on record that Applicant No. 1 had filed a complaint alleging that the Respondent did not pass on the benefit of exemption of GST on Sanitary Napkins. vide Notification No. 19/2018 Central Tax (Rate) Dated 26.07.2018. by way of commensurate reduction in price, in terms of Section 171 of the Central Goods and Services Tax, Act, 2017. 6. Section 171 of the CGST Act provides as under:- Any-reduction in rate of tax on any supply of goods or services or the benefit of ITC shall be passed on to the recipient by way of commensurate reduction in prices. It is clear from the plain reading of Section 17 (1) mentioned above th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 133 (3) (a) of the CGST Rules, 2017 orders that the Respondent shall reduce the prices to be realized from the recipient commensurate with the benefit exemption received by him. 10. It is evident from the above narration of facts that Respondent has denied the benefit of exemption of GST w.e.f. 27.07.2018 on Sanitary, Napkins Section to the customers in-contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and he has thus committed an offence Under Section 171 (3A) of the above Act and therefore. he is liable for imposition of penalty under the provisions of the above Section. Section 171 (3A) of the CGST Act, 2017 has been inserted in the CGST Act, 2017 vide Section 112 of the Finance Act, 2019, and the same became operational w.e.f. 01.01.2020. As the period of investigation was 27.07.2018 to 31.10.2020, therefore, the Respondent is liable for imposition of penalty under the provisions of the above Section. Accordingly, notice be issued to him to explain why penalty as prescribed under Section 171 (3A) should not be imposed him. 11. The concerned jurisdictional CGST/SGST Commissioner is also directed to ensure compliance of this Order. It may be ensure ..... X X X X Extracts X X X X X X X X Extracts X X X X
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