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2018-VIL-13-NAA

SGST National Anti/Profiteering Authority

GST – National Anti-Profiteering Authority - reduction of tax from 28% to 18% w.e.f. 15.11.2017 - allegation of profiteering on account of maintaining of same MRPs which was charged before the above date, in case of the two products namely, Johnson & Johnson Baby Shampoo and Johnson & Johnson Baby Powder – Respondent submission that billing was provided and fully controlled by J&J and he couldn't make any modifications in the billing software and sold the subject products on the MRPs which were uploaded in the software – HELD - there is no doubt that the Respondent had increased the base prices of the above products w.e.f. 15.11.2017, whereas he was required not to increase them and after charging GST 18%, he was legally bound to charge the reduced prices so as to pass on the benefit of reduced tax rate to his customers and hence he has indulged in profiteering - the Respondent had increased the base prices of 130 products which were supplied by him during the period between 15.11.2017 to 31.03.2018 and by doing so he had resorted to profiteering on account of increase in their base prices - The Respondent has also not produced any evidence to show that he had made any correspondence with J&J to inform it that he was bound to reduce the prices due to reduction in the rate of tax and J & J should either not increase the base prices or compensate him for the benefit he was bound to pass on to his customers, therefore, it is quite apparent that he had deliberately charged the enhanced prices with an intention to pocket the amount which he was bound to pass on to the recipients. Therefore, the contention of the appellant cannot be accepted - the Respondent had issued incorrect invoices while selling all the subject products to his customers as he had not correctly shown the basic prices which he should have legally charged from them and also compelled them to pay additional GST on the increased prices through the incorrect tax invoices which would have otherwise resulted in further benefit to the customers which he had failed to pass on - the Respondent 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) (1) of the 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 - Since the recipients in this case are not identifiable the DGAP is directed to get the amount of profiteering along with interest deposited from the Respondent in the Consumer Welfare Fund of the Central and the concerned State Govt. as per the provisions of Rule 133 (3) (c) of the CGST Rules, 2017 - fresh notice be issued on why penalty should not be imposed for the above offence

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