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TMI Blog2019 (6) TMI 715X X X X Extracts X X X X X X X X Extracts X X X X ..... However, the Applicant No. 1 stated that the benefit of this reduction in the rate of tax was not passed on to the consumers by the DTH operators when the GST was introduced w.e.f. 01.07.2017. Thus, it was alleged that the Respondent had indulged in profiteering in contravention of the provisions of Section 171 of CGST Act, 2017. 2. The above reference was examined by the Standing Committee on Anti-Profiteering and was further referred to the DGAP vide minutes of its meeting dated 20.12.2017 for detailed investigations under Rule 129 (1) of the CGST Rules, 2017. 3. The DGAP vide his report dated 13.03.2019 has stated that after scrutiny of complaint made by the above Applicant, it was observed that the complaint did not contain any evidence of profiteering and the allegation was too general in nature which was directed against all the DTH operators and no meaningful investigation could be conducted in the matter. Thus, the DGAP vide its letter dated 29.01.2018, requested the Standing Committee to reconsider its decision to refer the said application to the DGAP for detailed investigation, as no investigation could be conducted in the absence of documentary evidence. 4. The Stand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icant and ask him to submit evidence in support of his allegation and the opportunity of personal hearing should have been given to the Applicant No. 1, in accordance with the principles of natural justice. The Authority further observed that as the DTH operators were known and identifiable, they could have been summoned during the investigation to ascertain the veracity of the allegations made against them, as it involved larger public interest. 8. The DGAP vide emails dated 08.05.2018, 21.05.2018 and 18.07.2018 requested the above Applicant to submit specific details regarding his allegations. 9. The above Applicant, vide his e-mail dated 21.07.2018 submitted that his complaint pertained to all the leading DTH operators in the country. The above Applicant also added that he had no pre-GST invoice to substantiate the claim of reduction in the rate of tax in the post-GST era, as evidence of profiteering. However, he mentioned that in the pre-GST period, he was a customer of Airtel Digital TV and he had subscribed to a plan of Rs. 299 per month and post-GST, he had switched to another DTH operator. 10. The DGAP vide his e-mails dated 25.07.2018 and 02.08.2018 further requested th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Respondent further submitted the requisite documents but categorically denied the allegation of profiteering and objected that initiation and conduct of proceedings in his case was not in accordance with the prescribed Rules and requested to drop the proceedings. The Respondent also contested the procedure followed by the Standing Committee in recommending investigation in the present case on the following grounds:- * The recommendation of the Standing Committee was not based on the recommendation of any Screening Committee and accordingly, procedure under Rules 128(1) of the Rules was not followed. * The complainant had not provided any evidence in support of the allegation of profiteering. * The Standing Committee had not examined the accuracy and adequacy of the evidence provided in the application, to determine whether there was prima facie evidence to support the claim of the Applicant and applicability of Section 171 of the Act. * No opportunity of being heard was afforded to the Respondent by the Standing Committee. 16. The Respondent further added that the above Applicant had quoted wrong details of some random subscriber to lodge a frivolous complaint and ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how that the supplier had not passed on the benefit of reduction in the rate of tax or the benefit of input tax credit to the recipients by the way of commensurate reduction in prices, it could refer the application to the DGAP for detailed investigation. But, in the present case, the provisions of Rule 128 were not followed in referring this complaint for investigation, since no evidence was available to be examined for its accuracy and adequacy. 19. The Respondent further added that as laid down in Rule 126 of the Rules, no methodology and procedure had been published by the Authority for determination of profiteering. So, the proceedings should be dropped forthwith. The Respondent also submitted that Section 171 of the CGST Act, 2017 could be invoked only in the following two instances: * Where there is any reduction in the rate of tax, and * Where there is benefit of input tax credit. But in the present case, there had been no reduction in the rate of tax on the services supplied by him after implementation of GST and thus, the question of passing on the benefit did not arise. 20. The Respondent further added that the Entertainment Tax was neither allowed as input tax cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re different in the pre-GST and post-GST periods, the transitions were different in terms of benefit, having significant change in the overall value received by the customers and hence, application of anti-profiteering provisions in his case was not feasible and that on an average, he had been increasing the customer pack prices once in every six months, but upon introduction of GST, he had decided not to increase the prices of packs till December, 2017, to pass on the possible benefit due to the transition to the GST and price revision exercise was undertaken by the Respondent only in December, 2017 and then in July, 2018. 23. The DGAP in his report observed that the main issues for determination were whether there was benefit of reduction in the rate of tax on the supply of DTH services by the Respondent after implementation of GST w.e.f. 01.07.2017 and if so, whether the Respondent had passed on such benefits to the recipients in terms of Section 171 of the Act. The DGAP also noted the contention of the Respondent that the referral of his case to the DGAP by the Standing Committee on Anti-profiteering was not maintainable for the reason that the application/complaint was not su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng with the cum-tax price, it was not possible to compare the price of the old package with that of the new one. The DGAP has further intimated that no correlation between the pricing of packages and Entertainment Tax for any State in the pre-GST era could be made on account of the fact that the Entertainment Tax structure varied from State to State and that such Entertainment Tax, even if paid by the Respondent, was not charged/recovered from his customers. The DGAP has further added that the prices of the packages charged by the Respondent in the pre-GST era from all his customers across the country were the same and were inclusive of only Service Tax. Prior to introduction of GST, the effective rate of Service Tax was 15% (14% Service Tax + 0.5% Swachh Bharat Cess + 0.5% Krishi Kalyan Cess) on all the packages, which was increased to 18% on introduction of GST w.e.f. from 01.07.2017. The DGAP has also contended that the above Applicant had failed to submit any invoice to support his allegation that the burden of Entertainment Tax was passed on by the Respondent to the recipients and negate the claim of the Respondent that the Entertainment Tax was cost to the Respondent and was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also revealed from the record that the Applicant was not a subscriber of the Respondent and he had filed the present complaint on the basis of the plan chosen by another subscriber, Sh. Vijender Kumar. The details of the plan given by the above applicant also do not match with the plan adopted by him as he had not subscribed to the 'Value Prime' plan but had subscribed to a different plan called 'My Plan' and these above mentioned two plans had different values and features and they could not be compared. Therefore, the allegations made by the Applicant No. 1 has not been established. 32. It is further found from the record that the Entertainment Tax was neither allowed as ITC in pre GST era nor has been allowed in the GST era, and that the cost of the entertainment tax was borne by the Respondent himself as is clear from the invoices produced by him. Accordingly, there is no ground to believe the contention of the above Applicant as no benefit of ITC has accrued to the Respondent which was required to be passed on. 33. It is also apparent that the plans and packages post GST had been changed and thus, there were no comparable prices for the old packages with that of the new on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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