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2018 (12) TMI 1401 - NAPA - GSTProfiteering - supply of Granure Hard Nero-10 MM & Granure Hard Crema-10 MM Tiles - benefit of reduction in rate of tax not passed on - Section 171 of the CGST Act - Held that - It is evident that the base prices of both the products had remained same. It is also observed from the Annexure-6 attached with the Kerala Screening Committee s report that sale price of these products was reduced from ₹ 1037.52 (pre-GST revision) to ₹ 840.68 (post-GST revision) when the GST rate on the above items was revised from 28% to 18%. Thus it is clear that the base prices have not changed and accordingly the selling prices of the products have been reduced. This fact has also not been disputed by the representative of the Applicant No. 1. It is apparent from the perusal of the facts of the case that the Respondent has duly passed on the benefit of reduction in the tax rate by keeping the base price constant thus reducing the selling price of the products in question. Therefore the anti-profiteering provisions contained in Section 171 (1) of the CGST Tax Act, 2017 are not attracted - thus, Respondent has not contravened the provisions of Section 171 of the CGST Act, 2017. Application dismissed.
Issues involved:
1. Allegation of profiteering by the Respondent on the supply of specific tiles by not passing on the benefit of reduction in GST rate. 2. Examination of whether the benefit of reduced tax rate was passed on to the recipient as per Section 171 of the CGST Act. Detailed Analysis: 1. The case involved an allegation of profiteering against the Respondent regarding the supply of specific tiles, where it was claimed that the benefit of reduced GST rate was not passed on to the customers. The Kerala State Screening Committee on Anti-Profiteering referred the case to the Standing Committee, which further directed the Directorate General of Anti-Profiteering (DGAP) to conduct a detailed investigation under Rule 129 (6) of the CGST Rules, 2017. The DGAP's report revealed that the GST rate on the products in question was reduced from 28% to 18% w.e.f. 15.11.2017. However, upon scrutiny of the invoices issued by the Respondent before and after the GST rate reduction, it was found that the base prices of the products remained the same, indicating that the benefit of the reduced tax rate was indeed passed on to the customers. 2. The Authority carefully examined the DGAP's report and the supporting documents to determine whether there was a reduction in the GST rate and if the benefit of the tax reduction was effectively transferred to the customers in accordance with Section 171 of the CGST Act. It was observed that the base prices of the products did not change despite the GST rate reduction, and the selling prices were reduced from pre-GST revision to post-GST revision. The representative of the Applicant No. 1 also acknowledged this fact during the hearing. Consequently, it was concluded that the Respondent had not contravened the provisions of Section 171 of the CGST Act, as the benefit of the reduced tax rate was passed on by maintaining the base price constant and reducing the selling price of the products in question. In conclusion, the judgment dismissed the application filed against the Respondent, as it was established that there was no profiteering as alleged. The Respondent was found to have complied with the anti-profiteering provisions by passing on the benefit of the reduced tax rate to the customers. The order was to be communicated to all parties involved, and the case file was to be closed upon completion.
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