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TMI Blog2019 (5) TMI 359X X X X Extracts X X X X X X X X Extracts X X X X ..... to 18% by increasing the base price to maintain the same cum-tax selling price which was prevalent before the reduction He also stated that he had purchased "68766- Glass for GT 03-RO Gas Stove" (here-in-referred to as the product) from the outlet of the Respondent, on 06.08.2018 where he had charged GST @ 28% in the invoice No. 001252 dated 06.08.2018. However, after objection by the Applicant, the Respondent issued a new invoice No. 001403 dated 24.08.2018 charging GST @ 18%. He further stated that the Respondent had increased the base price of the impugned goods from Rs. 1640.62 to Rs. 1779.66 to maintain the same cum-tax selling price (Rs. 2100/-), even after charging GST at the lower rate of 18%. The Applicant had also claimed that the Respondent had indulged in profiteering in contravention of the provisions of Section 171 of the CGST Act, 2017 and hence appropriate action should be taken against him. 2. The Standing Committee vide the minutes of its meeting dated 08.10.2018 had requested the DGAP to conduct a detailed investigation under Rule 129 (1) of the CGST Rules, 2017. 3. A notice under Rule 129 of the CGST Rules, 2017, was issued on 13.11.2018, by the DGAP, calling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate) dated 14.11.2017,in consequence of which the Respondent was required to sell the above goods on the base prices which was being charged by him before 15.11.2017 and levy GST @18% so that the benefit of reduction in the rate of tax could be passed on to his recipients. 6. The DGAP while examining Section 171 of the CGST Act, 2017 which governs the anti-profiteering provisions under GST, has stated that Section 171(1) CGST Act, 2017 reads as "Any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices." Thus, the legal requirement was abundantly clear that in the event of a benefit of input tax credit or reduction in rate of tax, there must be a commensurate reduction in the prices of the goods or services. Such reduction could only be in absolute terms, such that the final price payable by a consumer must get reduced commensurate with the reduction in the tax rate and this was the legally prescribed mechanism for passing on the benefit of input tax credit or reduction in rate of tax to the recipients under the GST regime. 7. The DGAP has also submitted that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has stated that he agreed that an error was committed on his part and informed the DGAP that he had refunded Rs. 164/- to the Applicant by cheque, which the Applicant had also acknowledged. The Respondent has also filed his written submissions stating that the product was a spare part sold by him and the product was sold to his Authorised Dealers who used this as replacement of the broken Glass of the product. He further stated that he had also sold this product to his walk-in customers at his Company Service centres. He further stated that the GST rate for the product was reduced from 28% to 18% vide Notification 41/2017 dated 14.11.2017 and the Applicant was a walk in customer who was wrongly billed @ 28% due to a software rate updation error and the excess amount charged amounting to Rs. 164/- as computed bel had been already refunded to the Applicant vide Cheque No. 047999 drawn on HDFC Bank, which the Applicant had also acknowledged. The Respondent also calculated the amount to be refunded to the Applicant by him as under:- Particulars INR Selling Price (A) 2,100 Tax @ 28% 459 Base Price before change 1,641 Base Price (same) 1,641 Tax @ 18% 295 Selling pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in Gujarat (Nov 17 to Oct 2018) and 241 products sold during the period to all his walk-in customers. He further stated that he had dispatched letters to 15 customers for an amount of Rs. 2460/- and 14 cheques of Rs. 2296/- were pending to be dispatched. The Respondent further stated that while the DGAP working is based on average rate of sales for the period 01.11.2017 to 14.11.2017 and the difference in realization was Rs. 13,973/- and since he had refunded the amount, the proceedings may be dropped. 14. The Respondent vide his submissions dated 14.02.2019 stated that while considering the Authority's concern that whether the credit note would benefit the ultimate recipient, the Respondent had no reservation in depositing the amount of Rs. 13,973/- into the Consumer Welfare fund. 15. The Applicant vide his email dated 30.01.2019 submitted that the Respondent's claim that Rs. 164/- were refunded to him was not fair. He further submitted that he had refused to accept this amount as he knew that the Respondent would use it to dilute the case. He further submitted that he would accept the final amount as decided by the Authority and requested the Authority to take strict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g commensurate reduction in the prices, keeping in view the reduction in the rate of tax so that the benefit is passed on to the recipients. The above Respondent is also directed to refund the amount of Rs. 535/- to the Applicant along with interest @18% from the date when this amount was received by him from the Applicant No. 1 and deposit the remaining amount of profiteering of (Rs. 13,973/- (-) Rs. 535/- = Rs. 13,438/- (Rupees Thirteen Thousand Four Hundred Thirty Eight Only) along with interest @18% in the Consumer Welfare Fund of the Central and the concerned State Governments as per the provisions of Rule 133 (3) (c) of the CGST Rules, 2017 in the ratio of 50:50, till the same is deposited within a period of 3 months. 19. The concerned State CGST/SGST Commissionerates are also directed to get the amount of profiteering of Rs. 6,719 (Rupees Six Thousand Seven Hundred Nineteen Only) along with interest @ 18% respectively deposited from the Respondent in the respective Central/ State Consumer Welfare Fund as per the provisions of Rule 133 (3) (c) of the CGST Rules, 2017 as shown in the Table given below: 01 03 Punjab 535 267.50 02 07 Delhi 10 5 03 08 Rajasthan 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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