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2018 (7) TMI 1490 - NAPA - GSTProfiteering - refund of excess amount of GST paid - contravention of the provisions of Section 171 of the CGST Act, 2017. Held that - It is apparent that the base price of the Supplier was ₹ 11,993.75/- and on the cum tax price a discount of ₹ 500/- was offered. It is also revealed that the Almirah was supplied to the Applicant by the Supplier vide invoice dated 29.11.2017 in which the base price was again shown as ₹ 11,993.87/- and GST of ₹ 2158/- was charged @ 18%, as the same had been reduced by the Govt, of India on 14.11.2017 from 28% to 18%. Therefore, it is clear that the Supplier had charged correct rates of GST which were prevalent at the time of placing of the order and the supply of the Almirah through the above two invoices, therefore, no illegality had been done by the Supplier while executing the order placed by the Applicant. The Supplier has not resorted to profiteering by increasing his base price or appropriated the excess amount of tax charged from the Applicant and hence the allegation of violation of the provisions of Section 171 of the above Act is not established - It is also apparent that the Respondent was not the Supplier/manufacturer of the Almirah and was only an agent who had offered his platform to the Supplier to sell the Almirah by charging commission, and was also not responsible for collection or refund of GST and hence he cannot be held accountable for contravention of Section 171 of the CGST Act, 2017. Denial of discount of ₹ 500/- which was offered by the Supplier to the Applicant at the time of placing of the order on 4.11.2017 and which was withdrawn by him at the time of supply of the Almirah on 29.11.2017 - Held that - The withdrawal of discount does not amount to profiteering as the same was offered from his profit margin by the Supplier and does not form part of the base price and therefore, also the Supplier cannot be held guilty under Section 171 of the Act. The allegation of profiteering made by the Applicant against the Respondent as well as the Supplier is not established - the application is not maintainable and is dismissed.
Issues:
Allegation of profiteering against the Respondent and the Supplier based on differential pricing and GST rates at the time of order and delivery. Analysis: 1. The case involved an application alleging profiteering due to a price discrepancy in the purchase of a Godrej Interio Slimline Metal Almirah. The Applicant claimed that the Supplier overcharged him, contravening Section 171 of the CGST Act, 2017. 2. The Standing Committee referred the case to the DGAP for investigation under Rule 129 (1) of the CGST Rules, 2017, who analyzed the invoices and concluded that the Supplier had not profiteered as the base price remained consistent despite changes in GST rates. 3. The Authority reviewed the DGAP's report and directed further inquiry into cases of GST rate discrepancies. The Respondent refunded the excess tax collected, denying profiteering allegations and stating he was a platform provider, not the Supplier. 4. During the hearing, the Respondent reiterated his stance, emphasizing his role as a marketplace facilitator and not the Supplier. The DGAP clarified that the withdrawn discount did not constitute profiteering. 5. The Authority examined the order details, confirming that the Supplier adhered to prevailing GST rates and did not increase the base price. The Respondent's role as an agent, not the Supplier, was crucial in determining non-violation of Section 171. 6. It was established that the Respondent facilitated refunds and had initiated the process for cases of excess GST collection. The withdrawal of the discount by the Supplier was justified as it was offered from the profit margin, not the base price. 7. The Authority dismissed the application, finding no profiteering by the Respondent or the Supplier. The case highlighted the importance of prompt refund processes for excess taxes post-GST rate changes. 8. The Authority directed the audit of major e-platforms to ensure compliance with GST refund regulations, acknowledging potential similar cases of excess tax collection. This detailed analysis of the judgment showcases the investigation, findings, and conclusions regarding the alleged profiteering, emphasizing the roles of the parties involved and the adherence to GST regulations.
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