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TMI Blog2018 (11) TMI 1011X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise Duty+ 14.5% VAT) in the case of “Bathing Bar” and 16.5 % (2% Central Excise Duty + 14.5% VAT) in the case of “Instant Drink Powder 50 Gms.” It is also revealed that the Respondent was procuring both the above products on interstate basis from their sole vendors and this tax liability had increased by 3.5% post GST from 14.5% to 18% w.eJ 01.07.2017 and therefore, he had suffered loss on the supply of both the products in question - the base price of these products had been reduced by the Respondent to maintain the same MRP (Pre GST MRP) inspite of the increase in the tax rate of both the above products. The anti-profiteering provisions contained in Section 171 (1) of the CGST Tax Act, 2017 are not attracted in the present case. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... total 27% incidence of tax, built in the MRP till 30.06.2017 and after the implementation of the GST w.e.f. 01.07.2017, when the rate of tax was fixed as 18% on the above products they were still being sold at the above MRP by increasing their base prices. She had further alleged that the Respondent had indulged in profiteering in contravention of the provisions of Section 171 of CGST Act, 2017 and therefore, action should be taken against him. The above Applicant had also submitted copies of the tax invoices dated 09.01.2018 for both the products and the labels of the products showing their MRP, Batch No. and manufacturing dates in support of her claims. 2. The above applications were examined by the Standing Committee on Anti-Profiteer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oth the products @ 14.5%. Therefore, the effective tax rate on both the products before coming in to force of the GST on 01.07.2017 was not 27% (12.5% Central Excise Duty + 14.5% VAT), as had been claimed by the above Applicant, but it was 14.5% with Nil Central Excise duty + 14.5% VAT in the case of Bathing Bar and 16.5% with 2% Central Excise duty + 14.5% VAT in the case of Instant Drink Powder 50 Gms. which had been incresed to 18% after the implementation of the GST w.e.f. 01.07.2017 and hence there was no reduction in the rate of tax .. 5. It has also been stated by the DGAP in his Report that when the pre-GST stock of Bathing Bar in the GST regime was compared with it's stock in the pre GST regime, no change was found the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te an increase in tax rate from 14.5% to 18%, the MRP had remained unchanged at Rs. 95/- which had resulted in the loss of ₹ 3.76 out of gross margin to the Respondent. The DGAP has therefore, contended that as the reduction in the base Price was more than the lTC, the allegation of profiteering was not established. 7. In respect of the Instant Drink Powder 50 Gms. the DGAP has observed that there was no change in ithe ITC and the Respondent's cost price had remained the same at ₹ 18.86. The DGAP has further observed that when the sale of old pre GST stock of the above product in the GST era was compared with the sale in the pre-GST regime, although the rate of tax had increased from 14.5% to 18% after the implementatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o maintain the same MRP inspite of the increase in the tax rate, therefore, The anti-profiteering provisions contained in Section 171 (1) of the CGST Act, 2017 had not been contravened by the Respondent. 10. The above report was considered by the Authority in its meeting held on 21.08.2018 and it was decided to hear the Applicant No. 1 on 05.09.2018. However, she did not appear during the hearing and informed via e-mail dated 04.09.2018 that she would not be able to attend and there was nothing more to supplement her complaints except that the Authority might ascertain whether the Bathing Bars were actually manufactured in the unit located in Uttarakhand and hence were eligible for availing the benefit of area based exemption, as had bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.5%Excise Duty + 14.5% VAT), as had been mentioned by the Applicant No.1 in her applications, but it was 14.5% (Nil Central Excise Duty+ 14.5% VAT) in the case of Bathing Bar and 16.5 % (2% Central Excise Duty + 14.5% VAT) in the case of Instant Drink Powder 50 Gms. It is also revealed that the Respondent was procuring both the above products on interstate basis from their sole vendors and this tax liability had increased by 3.5% post GST from 14.5% to 18% w.eJ 01.07.2017 and therefore, he had suffered loss on the supply of both the products in question. It is further revealed that the base price of these products had been reduced by the Respondent to maintain the same MRP (Pre GST MRP) inspite of the increase in the tax rate of both t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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