9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (1) TMI 139 - NAPA - GSTProfiteering - four models of Motor Car - benefit of reduction in the rate of tax not passed - contravention of Section 171 of the CGST Act, 2017 - Held that - First of all it is observed that the rate of tax was 15.63% in the pre-GST era which was increased to 29% in the post-GST era - It is evident that before discount base prices of all the products had remained the same. These facts have also not been disputed by the representative of the Applicant No. 1. Hence the provisions of Section 171 of the CGST Act 2017 are not attracted. It is clear that the Respondent has not contravened the provisions of Section 171 of the CGST Act, 2017 and hence there is no merit in the application filed by the Applicant - application dismissed.
Issues Involved:
1. Alleged profiteering by the respondent on the supply of four models of motor cars by not passing on the benefit of reduction in the rate of tax at the time of implementation of GST. 2. Examination of whether there was a reduction in the rate of tax during the implementation of GST. 3. Determination of whether the benefit of reduction in the rate of tax was passed on to the recipient as per Section 171 of the CGST Act, 2017. Issue-wise Detailed Analysis: 1. Alleged profiteering by the respondent: The Kerala State Screening Committee on Anti-Profiteering referred the case to the Standing Committee on Anti-profiteering, alleging that the respondent did not pass on the benefit of tax reduction on four models of motor cars (Wagon R VXI AMT, Swift VXI, Alto 800 LXI, and Wagon R VXI) after the implementation of GST from 01.07.2017. The committee relied on two invoices issued for each of the four products. 2. Examination of tax rate reduction: The Directorate General of Anti-Profiteering (DGAP) investigated the matter and found that in the pre-GST era, the products attracted a total duty incidence of 15.63%, which included Central Excise Duty, CST, National Calamity Contingent Duty (NCCD), Auto Cess, and Infra Cess. Post-GST implementation, the GST rate on these models was fixed at 29%, which included Central GST, State GST, and Compensation Cess. The DGAP's report highlighted that there was no reduction in the rate of tax; instead, there was an increase from 15.63% to 29%. 3. Determination of benefit passing as per Section 171 of the CGST Act, 2017: The DGAP's report analyzed the pre-GST and post-GST sale invoice details, showing that the selling price to the dealer increased primarily due to the higher tax rate in the post-GST era. The net base prices (after discount) of the products were also scrutinized. It was observed that the respondent reduced the base price for Wagon R VXI and Alto 800 LXI but increased the net base price for Wagon R AMT and Swift VXI (O) marginally due to a reduction in discounts while keeping the base prices excluding discounts the same. The DGAP concluded that the anti-profiteering provisions under Section 171(1) of the CGST Act, 2017, were not attracted as there was no reduction in the rate of tax. The Kerala Screening Committee, represented by Smt. A. Shainamol, Additional Commissioner, SGST, Kerala, agreed with the DGAP's findings. Judgment: The Authority carefully considered the DGAP's report and the documents on record. It was observed that the tax rate increased from 15.63% pre-GST to 29% post-GST, and the base prices before discounts remained the same. Therefore, the provisions of Section 171 of the CGST Act, 2017, were not attracted. Consequently, the respondent did not contravene the provisions of Section 171, and the application filed by the applicant was dismissed. A copy of the order was directed to be sent to both applicants and the respondent free of cost, and the case file was consigned after completion.
|
