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TMI Blog2019 (6) TMI 1266X X X X Extracts X X X X X X X X Extracts X X X X ..... n 171 of the CGST Act, 2017. The records clearly show that the Respondent has supplied a total number of 6380 footwears out of which 1451 were impacted by the reduction in the rate of GST from 18% to 5% w.e.f. 27.07.2017 - the Respondent is hereby directed to reduce the price of the products as per the provisions of Rule 133 (3) (a) of the CGST Rules, 2017, by making 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. Penalty - HELD THAT:- Respondent has issued incorrect invoices while selling the above products to his recipients as he had not correctly shown the basic prices which he should have legally charged from them. The Respondent has also collected additional GST on the increased prices through the incorrect tax invoices which would have otherwise resulted in further benefit to the customers which he had failed to pass on. It is also established from the record that the Respondent has consciously acted in contravention of the provisions of the CGST Act, 2017 by issuing incorrect invoices which is an offence under Section 122 (1) (i) of the above Act - respondent is liable for impositio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forwarded the same to the DGAP to initiate investigation under Rule 129 (1) of the CGST Rules, 2017 to examine whether the benefit of reduction in the rate of tax on the product had been passed on by the Respondent to the Applicant. 3. The DGAP on receipt of the above minutes had called upon the Respondent vide notice dated 15.10.2018 to reply as to whether he admitted that the benefit of reduction in rate of tax had not been passed on to the recipients by way of commensurate reduction in price and that he had contravened the provisions of Section 171 of the CGST Act, 2017. The Respondent was also asked to suo-moto determine the quantum of benefit not passed on, if any and indicate the same in his reply to the notice issued by the DGAP. The Respondent was also given an opportunity to inspect the nonconfidential evidences/information submitted by the Applicant, however the Respondent did not avail this opportunity. The Applicant was also given an opportunity vide DGAP's e-mail dated 22.03.2019 to inspect the non-confidential documents/reply furnished by the Respondent but he also did not avail this opportunity. 4. The DGAP had requested for granting extension ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duct at the base price of pre-rate revision of 26.07.2018 and should have charged lower GST @ 5% w.e.f. 27.07.2018 on such base price, to pass on the benefit of reduction in the rate of tax from 18% to 5%. But based on invoices submitted by the Respondent it was noticed that the base price of the product was increased to maintain the pre-GST rate reduction cum-tax price charged from the recipients. The DGAP has also informed that from the invoice of the product, the base price (excluding GST), was increased from ₹ 592.37/- to ₹ 665.71/- which maintained the cum-tax price even with reduced rate of GST @5%, at ₹ 699/-, thus denying the benefit of tax reduction to the recipient. 8. The Report further submitted that, the Respondent had sold his products in the State of Delhi and Haryana and based on the price lists submitted by the Respondent it was clear that the base prices of most of his products in the price range of ₹ 500/- to ₹ 1,000/, had been increased after reduction in the GST rate w.e.f. 27.07.2018. The DGAP has further based on the outward sale registers of the Respondent found that during the period 27.07.2018 to 30.11.2018, the Respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e running an exclusive showroom of M/s. Liberty Shoe Ltd. and was given the software used for billing and he could not make any modification to the billing software since it was fully controlled by M/s. Liberty Shoe Ltd. . The Respondent clarified that no such reply dated 13.03.2019 was filed by him during the course of proceedings with the DGAP. He also claimed that the company had recommended the billing software and considering the inbuilt features and advantages he had opted for it. He has further submitted that since he was the dealer for the products of M/s. Liberty Shoe Ltd., he had full discretion at his hand to extent the benefits of discounts/reduction to the end consumer. 12. We have carefully considered the material placed before us and the submissions made by the Respondent, dated 27.05.2018 and it has been revealed that the Central Govt. vide Notification No. 18/2018- Central Tax (Rate) dated 26.07.2018 had reduced the rate of GST from 18% to 5% in respect of footwear priced between ₹ 500/- to ₹ 1000/-, with effect from 27.07.2018 and the benefit of the same was required to be passed on to the recipients by the Respondent as per the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rule 133 (3) (c) of the CGST Rules, 2017 in the ratio of 50:50, within a period of 3 months as is given in the Table below:- No. State Code State (Place of Supply) Profiteered Amount (Rs.) 50% of the Profiteered Amount (Rs.) 1 06 Haryana 3,72,763 186381.50 2 07 Delhi 2,82,467 141233.50 Total 6,55,230 327615 50% - payable to Central Fund (Rs.) 327615 50% payable to State Fund (Rs.) 327615 15. The payment of ₹ 3,27,655/- paid through demand draft no. 500576 dated 07.06.2019 and ₹ 3,27,655/- paid through demand draft no. 5579 dated 21.06.2019 that has been deposited into the Central Consumer Welf ..... X X X X Extracts X X X X X X X X Extracts X X X X
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