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2019 (4) TMI 380 - NAPA - GSTProfiteering - Gypsum Board - benefit of reduction in the rate of tax not passed on - contravention of the provisions of Section 171 of CGST Act, 2017 - Held that - It is apparent from the perusal of the facts of the case and the invoices placed on record that there was no reduction in the rate of tax on the above product w.e.f. 01-07-2017 instead the rate of tax in the pre GST era which was 14.75% has increased to GST @ 28% in the post GST era. Therefore, the allegation of profiteering is not sustainable in terms of Section 171 of the CGST Act, 2017 as there is no reduction in the rate of tax. Application dismissed.
Issues involved:
Allegation of profiteering by not passing on tax rate reduction benefit under Section 171 of CGST Act, 2017. Detailed Analysis: 1. Allegation and Investigation: The case involved an allegation of profiteering by the Respondent on the supply of 'Gypsum Board' post-GST implementation. The Kerala State Screening Committee referred the case to the Standing Committee on Anti-profiteering, which further directed the DGAP for detailed investigation under Rule 129 (1) of the CGST Rules, 2017. 2. Observations and Findings: The DGAP's report highlighted the tax rate difference pre and post-GST era for the product. It was noted that there was no reduction in the tax rate on the product post-GST implementation. The rate of tax increased from 14.75% in the pre-GST era to 28% in the post-GST era. As per Section 171 of the CGST Act, 2017, the reduction in the tax rate should be passed on to the recipient, which was not applicable in this case due to the absence of a tax rate reduction. 3. Authority's Decision and Re-investigation: The Authority decided to ask the Kerala Screening Committee to appear since there was no complainant. After discrepancies were noted in the DGAP's report, the case was returned for re-investigation under Rule 133 (4) of the CGST Rules, 2017. 4. Re-investigation and Final Decision: The DGAP's subsequent report reaffirmed that there was no reduction in the tax rate on the product. The rate had increased post-GST implementation, and hence, the provisions of Section 171 of the CGST Act, 2017 were not contravened. The Authority, after careful examination, dismissed the application as there was no case of tax rate reduction, making the allegation of profiteering unsustainable. 5. Legal Provisions and Conclusion: Section 171 of the CGST Act, 2017 mandates the passing on of any tax rate reduction benefit to the recipient. In this case, since there was no reduction in the tax rate, the allegation of profiteering was deemed meritless, leading to the dismissal of the application. The order was to be shared with all concerned parties, concluding the case. This detailed analysis encapsulates the legal judgment regarding the allegation of profiteering and the application of Section 171 of the CGST Act, 2017 in the context of tax rate changes pre and post-GST implementation for the product 'Gypsum Board'.
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