2019 (11) TMI 468 - NAPA - GST

Anti-profiteering - supply of the book titled Ragas in Hindustani Music Conceptual Aspects (without cassette) - benefit of reduction in the GST rate not passed on - violation of provisions of Section 171 of the CGST Act, 2017 - quantum of profiteering - HELD THAT - The allegation that the Respondent had not passed on the benefit of reduction in the tax rate is not sustainable - Accordingly, the application filed by the Applicant requesting action against the Respondent for alleged violation of the provisions of the Section 171 of the CGST Act is not maintainable. Application dismissed.

Summary

Issues involved:
1) Allegation of profiteering in the supply of a book due to non-passing of benefit from GST rate reduction.

Analysis:
1) The case involved an allegation of profiteering by the Respondent in the supply of a book titled "Ragas in Hindustani Music: Conceptual Aspects (without cassette)" as the Applicant claimed that despite a reduction in GST rate from 12% to NIL, the selling price remained the same, indicating non-passing of the benefit to recipients.

2) The Director General of Anti-Profiteering (DGAP) conducted a detailed investigation after receiving the application and issued a notice to the Respondent to reply regarding the allegation. The Respondent, however, submitted that the book fell under an exempted category and had not been charging GST even before the rate reduction.

3) The main issue for determination was whether the Respondent had passed on the benefit of the GST rate reduction to the recipients as per Section 171 of the CGST Act, 2017. The DGAP's report highlighted that the product in question was a printed book exempted from GST since 2017, and there was no reduction in the GST rate applicable to it from 01.01.2019.

4) The National Anti-Profiteering Authority examined the DGAP's report, the Applicant's submissions, and the invoices provided by the Respondent. It was observed that the Respondent did not charge GST before or after the rate reduction date, hence, the question of profiteering did not arise in this case.

5) However, it was noted that the invoices issued by the Respondent lacked the HSN classification, which was a violation of the CGST Act. The correct classification of the book needed further examination by the Jurisdictional Commissioner for appropriate action.

6) The Authority concluded that the allegation of non-passing the benefit of the tax rate reduction was not sustainable, and the application against the Respondent under Section 171 of the CGST Act was dismissed. The order was to be shared with both parties, and the case file was to be closed after completion.