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2019 (2) TMI 294 - NAPA - GSTProfiteering - Brief (Jockey Brief IC125 M Black) - benefit of reduction in the rate of tax not passed on - contravention of the provisions of Section 171 of Central Goods and Service Tax Act, 2017 - Held that - There was no reduction in the rate of tax on the above product w.e.f. 01.07.2017, and hence the anti-profiteering provisions contained in Section 171 (1) of the CGST Act, 2017 are not attracted - there is no merit in the application filed by the above Applicants - application dismissed.
Issues: Allegation of profiteering by the Respondent on the supply of a specific product by not passing on the benefit of tax reduction post-GST implementation.
Analysis: 1. The case involved an allegation of profiteering against the Respondent for not passing on the benefit of tax reduction on a specific product post-GST implementation. The Kerala State Screening Committee alleged that the Respondent did not reduce prices despite a tax rate change from Central Excise duty exemption and 5% VAT to a fixed 5% GST rate. 2. The Standing Committee on Anti-Profiteering referred the case to the Directorate General of Anti-Profiteering (DGAP) for detailed investigation under Rule 129(1) of the CGST Rules, 2017. The DGAP's report confirmed that the tax rate on the product remained the same pre and post-GST, and the base prices also remained unchanged. Thus, the provisions of Section 171 of the CGST Act, 2017 were not contravened, and the allegation of profiteering was not established. 3. Despite the Kerala Screening Committee's observations of an increase in sales value post-GST, the National Anti-Profiteering Authority found that there was no reduction in the tax rate on the product in question. As per Section 171(1) of the CGST Act, any reduction in the tax rate should result in a commensurate reduction in prices, which was not applicable in this case. 4. The Authority dismissed the application, stating that the anti-profiteering provisions under Section 171(1) of the CGST Act, 2017 were not attracted due to the absence of a tax rate reduction post-GST implementation. The order was sent to both the Applicants and the Respondent, and the case file was closed after completion of proceedings.
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