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TMI Blog2020 (12) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... te reduction in the rate of GST from 28% to 18% w.e.f. 01.01.2019. The Applicant No. 1 had also alleged that the product "LG LED TV" having value of Rs. 12,600/- was sold at a lower price after the reduction in the GST rate from 28% to 18% w.e.f. 01.01.2019 levied vide Notification No. 24/2018-Central Tax (Rate) dated 31.12.2018 but without commensurate reduction in the price. The Applicant No. 1 had further alleged that the Respondent had not passed on the benefit of reduction in the rate of tax in respect of the impugned product to the extent of 10% (28%-18%) by commensurate reduction in price as has been furnished in Table-'A' given below:- Table-'A' (Amount in Rs.) Product Description LG LED TV Before 01.01.2019 Base Price 9843.75 Tax Rate 28% Tax Amount 2756.52 Total 12,600 On or after 01.01.2019 Base Price 10169.49 Tax Rate 18% Tax Amount 1803.51 Total 12,000 Price Without Profiteering ought to be Base Price 9843.75 Tax Rate 18% Tax Amount 1771.88 Total 11614.74 Alleged Profiteering Profiteered Amount per unit 385.26 The Above Applicant had also submitted the following supporting documents along with his application:- a) APAF-1 Form. b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w the procedure prescribed under Rule 133 (5) and should be treated as a new investigation or enquiry following the procedure prescribed under the CGST Act and the Rules. Such investigation could be initiated only based on the written findings of this Authority on the submissions of the DGAP. The DGAP could not suo moto expand the scope of investigation without following the procedure laid down in the CGST Rules, 2017. b) The orders of the Hon'ble High Court of Delhi in the case of M/s. Reckitt Benckiser India (P) Ltd. v. Union of India & others in WP(C) 7743/2019 dated 19.07.2019 = 2019 (7) TMI 1135 - DELHI HIGH COURT and 22.08.2019 could be relied on wherein the Hon'ble High Court has granted an absolute stay on the proceedings initiated by the DGAP in as much as the DGAP had suo moto sought details of products not under investigation without following the procedure prescribed under Rule 133 of the CGST Rules, 2017. c) There had been sale of two type of Power Banks falling under HSN 8507 - Lithium Ion and Lithium Polymer. The Notification No. 24/2018 dated 31.12. 2018 had reduced the rate of tax on Lithium Ion Power Banks from 28% to 18% w.e.f. January, 2019. On pointing out by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s relied on the orders of the Hon'ble High Court of Delhi passed in the case of M/s. Reckitt Benckiser India (P) Ltd. v. Union of India & others in WP(C) 7743/2019 dated 19.07.2019 = 2019 (7) TMI 1135 - DELHI HIGH COURT, wherein the Hon'ble High Court has granted relief that only the enquiry as far as the complained product was concerned would continue till final disposal of the petition. The DGAP has intimated that there was no stay/directions issued on the present proceedings. The DGAP has further clarified that it was an interim relief only and not final judgement, so its ratio was not applicable in this case. 8. The DGAP has further informed that since it was a case of reduction in the rate of tax, it was important to examine the provisions of Section 171 (1) of the CGST Act, 2017, to ascertain whether the present case was a case of profiteering or not. Section 171 (1) 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 benefit of input tax credit (ITC) or reduction in rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T rate was reduced from 28% to 18% w.e.f. 01.01.2019, vide Notification No. 24/2018 Central Tax (Rate) dated 31.12.2018 and hence, the Respondent has profiteered an amount of Rs. 551/- on a particular invoice and thus the benefit of reduction in GST rate was not passed on to the recipient by way of commensurate reduction in the price, in terms of Section 171 of the CGST Act, 2017. On the basis of the calculation as illustrated in Table-'B' above, profiteering in case of all the impacted goods of the Respondent has also been arrived at in the similar way. 11. The DGAP has further claimed from the HSN Code wise summary data that the Respondent was dealing in total 150 HSN Codes, out of which 8 HSN Codes were impacted by GST rate reduction Notification No. 24/2018-Central Tax (Rate) dated 31.12.2018. The DGAP has also noticed from the invoices made available that the Respondent had sold 170 products falling in these 8 HSN Codes which were impacted, out of which 69 products (constituting 20% of total sales of impacted products during 01.01.2019 to 30.06.2019) were not sold in the pre-reduction period (i.e. 01.10.2018 to 31.12.2018) and the Respondent had not provided pre-rate reductio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I 10000mAH POWER BANK 2i BLACK 85076000 1,031 113,735 61 5,818 1,092 119,553 2 MI 10000mAH POWER BANK 2i RED 85076000 38 2,830 1 112 39 2,942 3 MI 20000mAH POWER BANK 2i WHITE 85076000 220 29,299 12 803 232 30,102 4 SONY ACCESSORIES PS4 DUAL SHOCK BL 95049090 8 7,056 - - 8 7,056 5 SONY POWERBANK 10000mah CP-V10B/BC 85076000 4 680 - - 4 680 6 SONY POWERBANK 20000MAH CP-V20A/BC 85076000 1 1,975 - - 1 1,975 7 SONY POWERBANK 5000mah CP-E5VPX/WC 85076000 3 390 1 100 4 490 8 SONY POWERBANK 8700mah BLK CP-V9/B 85076000 1 450 - - 1 450 9 SONY POWERBANK 8700mah WHT CP-V9/W 85076000 1 100 - - 1 100 10 STUFFCOOL POWERBANK 10000mAH GREY 85076000 2 499 - - 2 499 Grand Total 1,309 157,015 75 6,832 1,384 163,847 The DGAP has also intimated that he had requested the Respondent to provide the reasons for classification of the above products in non-impacted category vide email dated 17.12.2019, however, the Respondent had not responded. 13. The DGAP has further furnished the place (State) of supply-wise break-up of the total profiteered amount of Rs. 37,89,550/- (including Rs. 1,63,847/-) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price completely depended on the customer's bargaining power i.e. the price at which the customer was willing to purchase the product. The Respondent has further stated that the DGAP has been comparing two base prices that would not be same at any given point of time. He has illustrated that the DGAP has considered the base price of LG LED TV as Rs. 9,843.75/-, which was sold before 01.01.2019 and Rs. 10,169.49/- for the TV which was sold on or after 01.01.2019. II. Multiple prices for a product in a given period:- The Respondent has also submitted in respect of the impugned invoices for the month of May, 2018 and January, 2019, which were submitted by the Applicant No. 1 that the base price of the TV was higher in May, 2018 than the one considered for the month of January, 2019. The Respondent has also submitted the Sale Register of the aforementioned product (Annexure-I) for the months of May, 2018 and January, 2019 and claimed that there was a range of prices at which a single product could be sold in a particular period. The Respondent has also elaborated the details of the pricing methodology and submitted that in the given scenario where it was clearly established that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but not more than the MRP. It was quite evident from his submissions that no product was sold by him beyond the MRP. c. Final sale price depends on Customer's bargaining power - The Respondent has also stated that the manufacturer fixed the MRP of the product, however, the final price at which the product was sold completely depended on customer's bargaining power. The Respondent has further stated that at any given point of time, any product of same brand and same model could be sold at two different prices to two different customers at the same location depending on their respective bargaining power i.e. the price at which the customer was willing to purchase the product. d. Discounts offered by E-commerce and impact on Electronic Retail Industry:- The Respondent has also submitted that in the electronic retail industry, owing to the presence of online marketplaces offering attractive discounts, the retailers were sometimes forced to pay heed to the customer's negotiations who cited the prices prevalent on these online stores. In many instances, due to these factors, prices of certain products were dropped to offer the consumers the best available prices in the market. Give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P without any prior intimation and he was directed to submit the details of all the products impacted by the aforesaid notification. In this regard, the Respondent has stated that as per Rule 133 (5) of the CGST Rules, 2017 it was provided that if upon the receipt of the Report of the DGAP, this Authority had identified any profiteering component or believed that there was profiteering involved in respect of goods or services or both other than those which were already covered in the investigation Report then for reasons to be recorded in writing it could direct the DGAP to cause investigation or inquiry. He has also extracted Rule 133 (5) as under:- "Chapter XV - Anti-Profiteering Rule 133. Order of the Authority. Sub rule (5) (a) Notwithstanding anything contained in sub-rule (4), where upon receipt of the report of the Director General of Anti-profiteering referred to in sub-rule (6) of rule 129, the Authority has reasons to believe that there has been contravention of the provisions of section 171 in respect of goods or services or both other than those covered in the said report, it may, for reasons to be recorded in writing, within the time limit specified in sub-rule (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ality of a Parliamentary Act whether interim or final keeping in view the provisions contained in Clause (2) of Article 226 of the Constitution of India, will have effect throughout the territory of India subject of course to the applicability of the Act". XII. Computing profiteering using the Average Sale Price method wherein the average price was not representative of the correct price of the product was arbitrary and unfair:- The Respondent has also stated that the methodology adopted by the DGAP to calculate the average base price was not statistically accurate. The DGAP has computed profiteering by deducting the commensurate sale price from the actual price at which the product was sold. Commensurate sale price has been computed by calculating the average sale price of the product for the sales made during the period of December 2018. XIII. The Respondent has further stated that October to December was the season wherein the Respondent has offered discounts on a large scale on selling prices due to which the final prices at which the products were sold would be comparatively lower. Considering the same, using average sale price of December month was completely unfai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the prices at which the products were sold at any point of time during the period from January, 2019 to June, 2019 were falling in between the minimum and maximum limits as per Annexure-3. He has also submitted that he had also plotted the base prices computed by the DGAP using Annexure-20 in respect of the identified products and it was observed that the average base prices computed by the DGAP were also falling in between the limits identified by the Respondent. He has tabulated the same below for reference:- Product Name Avg. Base price Pre-GST Minimum base price (after discount) Pre-GST Maximum base price (after discount) SAMSUNG LED 32M5570 22,957 21,094 30,078 SONY LED 32W622F 23,366 17,969 25,781 SAMSUNG LED 32N4300 19,638 14,980 21,094 PANASONIC LED 32FS600D 17,861 15,625 21,874 LG LED 321AJ573D 18,516 15,313 21,641 PANASONIC LED 32FS490 15,249 13,281 17,969 PANASONIC LED 32F201DX 12,940 11,796 16,797 SAMSUNG LED 32N4000 14,107 10,937 16,406 AKAI LED AKLT32-DN132SV 11,263 10,539 14,063 SONY LED 32R202F 16,406 14,609 17,961 SONY LED 32W672F 26,182 22,656 28,898 AKAI LED AKLT32-80D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cool Power Banks were Lithium Polymer Power Banks which did not form part of GST rate reduction Notification No. 24/2018 dated 31.12.2018 due to which the Respondent had classified the same under the non impacted products and continued to charge same GST rate as earlier. The Respondent had submitted the same explanation before the DGAP vide e-mail dated 27.11.2019 and has furnished a copy of the e-mail as evidence as is given below:- Query Please clarify on what basis you have charged 18% on Power Banks (HSN: 8507) in the month of Dec.-18 Response The Respondent submits that there has been sale of two types of power banks falling under HSN 8507 - lithium ion and lithium polymer. The rate Notification No. 24/2018 dated 31 December 2018 has reduced the rate of power banks of Lithium ion from 28% to 18% w.e.f. January 2019. The Respondent was perusing the details of all invoices to understand where any lower rate of tax has been inadvertently applied and will remit the amount where applicable voluntarily under Section 73(5) of the CGST Act, 2017. Sony Play Station accessories: - The Respondent has also contended that he had inadvertently mapped the accessories of Play S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2018 to 31.12.2018 (pre-GST rate reduction) with the actual selling price of the same items sold during the post-GST rate reduction period i.e. on or after 01.01.2019 which was mentioned in Para-18 of the DGAP's Report dated 23.12.2019. d. The DGAP has also stated that the Respondent's submission that he had suffered loss in the accrual of ITC due to the reduction in the rate of GST was not correct. In this regard, the DGAP has submitted that under the GST, the credit of tax paid on all products (inputs) was available, accordingly, the GST component on the procurements did not form part of the cost of purchase of the products. As a result, any change in the rate of tax on purchase of products did not have any impact on cost. Therefore, there was no ITC loss on account of reduction in rate of tax from 28% to 18% as it did not change cost for the Respondent. e. The DGAP has further stated that the tax amount was computed at the reduced rate of 18% w.e.f. 15.11.2017 was correct. However, this in no way established that the commensurate benefit of the reduction in the GST rate was passed on by the Respondent to the customers. On the contrary, the fact was that the customers shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2019 submitted by the Respondent, the DGAP had found that invoice No. 1210/19E/S-8562 dated 30.06.2019 (Telangana State) was cancelled and therefore, he has recommended that profiteering amounting to Rs. 1,98,751/- should be reduced from the total profiteered amount of Rs. 37,89,550/-. i. The DGAP had failed to consider the detailed submissions made by the Respondent from time to time:- The DGAP has refuted the claim of the Respondent that he had submitted any documents/information dated 17.12.2019 to him. The various submissions made by the Respondent were listed in Para-10 of the DGAP's Report dated 23.12.2019. The DGAP has alleged that the Respondent did not co-operate during the course of investigation and had not submitted the pre-rate reduction base prices of specific products and clarifications for claiming Power Banks and Play Stations as non-impacted products, which had also found mention in Para-12 of the DGAP's Report dated 23.12.2019. j. The DGAP has also contested the claim of the Respondent that Power Banks and Play Stations were non-impacted products. Reference in this connection was made to Para-21 of the DGAP's Report dated 23.12.2019. The DGAP has also added ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ck clearance, festivals and product promotions. He has also depicted the price trend of top three products in respect of which profiteering was identified in the Report during the FY 2018-19. 18. Supplementary Report was sought from the DGAP on the above submissions of the Respondent. In response, the DGAP vide his Report dated 08.07.2020 has submitted that:- a. The Respondent's contention that the LG LED TV brand and model in the impugned invoices pertained to less than 24 inches model which was not impacted by the rate change Notification dated 31.12.2018 was absolutely incorrect. In this regard, the DGAP has contended from the website of the Respondent that the model No. LG LED 24LJ470 was a 24 inches model (Annexure-I) which was impacted by the GST rate reduction w.e.f. 01.01.2019, vide Notification No. 24/2018-Central Tax (Rate) dated 31.12.2018. The Respondent had himself submitted to the Principal Commissioner of Central Tax, Medchal Commissionerate, the price trend of the LG LED TV (HSN:8528 7218) in which aforesaid model fell, which clearly showed reduction in the rate of GST from 28% to 18% w.e.f. 01.01.2019 (Annexure-2). Hence, the DGAP has stated that he has rightly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T at the rate of 28% till 27.07.2018 which was reduced to 18% vide Para C (xii) of Notification No. 18/2018 CT (Rate) dated 26.07.2018. The Respondent has also contended that the LG LED TV 24LJ470 was within 68 cms. and the same was evidenced from the model specifications on vendor's website. The Respondent has further submitted that the comparison of sample invoices issued in May, 2018 and January, 2019 pertaining to the above model has formed the basis of the complaint and initiation of anti-profiteering investigation by the DGAP for the products covered under rate change Notification No. 24/2018-Central Tax rate dated 31.12.2018. 20. We have carefully considered the Reports of the DGAP, the submissions made by the Respondent and the material placed on record. On examining the various submissions we find that the following issues need to be addressed in the present case:- a. Whether the Respondent was required to pass on and has passed on the commensurate benefit of reduction in the rate of tax to his customers? b. Whether there was any violation of the provisions of Section 171 (1) of the CGST Act, 2017 in this case? 21. In this connection perusal of Section 171 of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cameras, Play Stations and Power Banks etc. being supplied by the Respondent, vide Notification No. 24/2018-Central Tax (Rate) dated 31.12.2018. Therefore, the Respondent is liable to pass on the benefit of tax reduction to his customers in terms of Section 171 (1) of the above Act. It is also apparent that the DGAP has carried out the present investigation w.e.f. 01.01.2019 to 30.06.2019. 23. It is also evident that the Respondent has been selling different variants of the Monitors, TVs, Digital Cameras, Play Stations and Power Banks etc. during the period from 01.01.2019 to 30.06.2019 to his customers. Upon comparing the average base prices as per the details of sale transactions submitted by the Respondent for the pre rate reduction period from 01.12.2018 to 31.12.2018 and the actual base prices post rate reduction w.e.f. 01.01.2019 to 30.06.2017 it has been found that the GST rate of 18% has been charged by the Respondent w.e.f. 01.01.2019 however the base prices of the products have been increased more than their pre rate reduction base prices, w.e.f. 01.01.2019 which shows that because of the increase in the base prices the cum-tax prices paid by the consumers were not reduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.2018 to 31.12.2018 and hence they practically give accurate, dependable and reasonable measure of the actual base prices charged during the above period. Therefore, the average pre rate reduction base prices of 101 products were computed by the DGAP, which were being sold by the Respondent during the period between 01.12.2018 to 31.12.2018, as is evident from the Annexure-20 attached with his Report, on the basis of which commensurate base prices post rate reduction were calculated in respect of the same products and compared with the invoice wise post rate reduction actual prices of these products, as per the computation illustrated in Table-B supra. The average pre rate reduction base price of each product was required to be compared with the actual post rate reduction base price of the same product as the benefit was required to be passed on each product to each customer and also to those customers who had not purchased the product during the pre rate reduction period. In case average to average base price is compared for both the periods, the customers who have purchased a particular product on the base price which is more than the commensurate base price, would not get the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lsorily charged by the Respondent. It is apparent from the invoices furnished by the Respondent himself which are attached as Annexure-I at page 24-28 of his submissions dated 18.02.2020, in respect of the LG LED 24LJ470 TV, that he has charged different prices to different customers during the post rate reduction period which proves that the Respondent was not bound to charge the MRP. Further, the Respondent was legally bound to pass on the benefit of rate reduction from 28% to 18% which he has denied by increasing the base prices which he was charging before the rate reduction and he has charged the same base prices or more which he was charging before the rate reduction. As per the provisions of the above Section, the Respondent was legally bound to reduce his cum-tax prices commensurately by charging GST @18% w.e.f. 01.01.2019 instead of 28%, rather than increase them in the post rate reduction period hence the above contention of the Respondent is not tenable. 26. The Respondent has further claimed that the final sale prices were dependent on the bargaining power of the customers. In this connection it would be pertinent to mention that the Respondent could charge different p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has further contended that the DGAP has not considered the fact that he was selling over 2000 different products and with the rate reduction, there had also been a reduction in the ITC on the purchases due to which the Respondent was striving hard to sell his goods at only the discounted rates and below the MRPs. The above claim of the Respondent is wrong as reduction in the tax rate in no way affects the prices of the Respondent as he is eligible to claim full ITC on the tax whether it is 28% or 18%. The Respondent is getting full ITC on the GST paid by him on his purchases which does not add any cost to him. Therefore, he cannot deny the benefit of tax reduction to his customers on the above ground. 29. The Respondent has also averred that he had initially received notice for submission of details of sale of Televisions up to 32 inches which was impacted by GST rate Notification No. 24/2018 dated 31.12.2018. However, the scope of investigation was expanded by the DGAP at a later point of time without any prior intimation and he was directed to submit the details of all the products impacted by the aforesaid Notification. However, the above claim of the Respondent is not supporte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed on by each registered person by commensurate reduction in prices on each supply to every recipient and this Authority is empowered to examine whether these benefits have been passed on or not. To assist this Authority an investigating agency designated as the DGAP has been created under Rule 129 of the CGST Rules, 2017 to conduct detailed investigation and submit Report to this Authority under Rule 129 (6) to determine whether the above benefits have been passed on or not in terms of Section 171 (1) and Rule 133 (1) of the above Rules. Under Rule 129 (2) the DGAP has mandate to conduct investigation and collect necessary evidence to determine whether these benefits have been passed on. Further, the Government of India, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs vide its Office Order No. 05/Ad.IV/2018 dated 12.06.2018 in pursuance of the Government of India (Allocation of Business) 34th Amendment Rules, 2018 has assigned the following duties to the DGAP: a) Conduct of investigation to collect evidence necessary to determine whether the benefit of reduction in the rate of tax on any supply of goods or services or the benefit of inpu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. Reckitt Benckiser India (P) Ltd. v. Union of India & others in W. P. No. 7743/2019 vide which the Hon'ble Court had restrained the DGAP to conduct investigation in respect of the other products of the Respondent except the complained product. The Respondent has also claimed that based on the above order no investigation could have been done in his case also. The above stand of the Respondent is not tenable as in the above case the Hon'ble High Court has granted only interim relief till the next date and has not passed the final judgement. Moreover, there is no such order in respect of the Respondent. The DGAP has already conducted investigation in respect of the goods being supplied by the Respondent and it has been established that the Respondent has resorted to profiteering and has denied the benefit of tax reduction to his buyers and hence he cannot misappropriate the profiteered amount under the above excuse. 34. The Respondent has also quoted the case of M/s. Jubiliant Food Works Ltd. v. Union of India & others supra pending in the Hon'ble High Court of Delhi in which the constitutional validity of Section 171 has been challenged and has claimed that the present proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the rate reduction had taken effect. Further the rates were generally increased by the same amount by which the rate of tax was reduced. Therefore, there is no doubt that the selling prices charged by the Respondent during the month of December, 2018 were not the lowest and hence they have been rightly taken in to account while calculating the pre rate reduction average base prices as well as the profiteered amount and hence the above claim of the Respondent is not tenable. 37. The Respondent has also pleaded that for comparison of the prices of the products the maximum price charged should be considered. In this regard it would be pertinent to mention that in case the maximum price is considered, the Respondent would be able to deny the benefit of tax reduction on every product. The Respondent has not explained that if the maximum price was considered how he would pass on the benefit of tax reduction. The Respondent has also submitted a Table in which the average prices computed by the DGAP for the pre rate reduction period have been compared with the pre GST minimum and maximum prices after discount and it has been claimed that the prices charged by him during the period from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Therefore, the above claim of the Respondent is untenable as the Notification No. 24/2018-Central Tax (Rate) dated 31.12.2018 had reduced the rate of tax from 28% to 18% in respect of the "Monitors and TVs of up to screen size of 32 inches". The product was mentioned in the complaint was TV of screen size of 24 inches which also comes under the same category. Therefore, it is established that the rate of tax during the month of May, 2018 was 28% on the above model which was reduced to 18% w.e.f. 01.01.2019 and hence, the complaint of not passing on the benefit of tax reduction made by the Applicant No. 1 is correct. However, the Respondent had not reduced the price of the complained product commensurately w.e.f. 01.01.2019. Therefore, the above claim of the Respondent cannot be accepted. 39. The Respondent has also pleaded that the DGAP has compared the invoice price of May, 2018 with that of January, 2019 to compute the profiteered amount. The above plea of the Respondent is wrong as the DGAP has computed the average base prices of the products sold by the Respondent in the month of December, 2018 and compared them with the actual base prices which were charged by the Responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... untenable. 42. The Respondent has also argued that the products falling under HSN Code 85076000 viz. MI Power Banks; Sony Power Banks and Stuffcool Power Banks were classified as impacted vide Table-C of the DGAP's Report dated 23.12.2019. However, the Respondent has claimed that there had been sale of two type of Power Banks falling under HSN Code 85076000 - Lithium Ion and Lithium Polymer. The GST rate Notification No. 24/2018 dated 31.12.2018 had reduce the rate of Power Banks of Lithium Ion from 28% to 18% with effect from 01.01.2019. All MI, Sony and Stuffcool Power Banks were Lithium Polymer Power Banks which did not form part of the GST rate reduction Notification No. 24/2018 dated 31.12.2018 which was the reason that the Respondent had classified the same under non impacted products and continued to charge the same GST rate as was prevalent earlier. The DGAP has stated in his clarifications dated 01.06.2020 that with regard to the Powers Banks (MI, Sony and Stuffcool), the Respondent has submitted screenshots of Power Bank description as battery type "Lithium Polymed' which was not impacted by the GST rate reduction Notification No. 24/2018-Central Tax (Rate) dated 31.12. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority as per Rule 136 of the CGST Rules 2017 directs the concerned Commissioners of CGST/SGST to monitor this order under the supervision of the DGAP by ensuring that the amount profiteered by the Respondent as ordered by the Authority is deposited in the CWFs of the Central and the State Governments as per the details given above. A report in compliance of this order shall be submitted to this Authority by the concerned Commissioners CGST [SGST within a period of 4 months from the date of receipt of this order through the DGAP. 46. It is also evident from the above narration of the facts that the Respondent has denied benefit of rate reduction to the buyers of his products in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and he has thus resorted to profiteering. Hence, he has committed an offence for violation of the provisions of Section 171 (1) during the period from 01.01.2019 to 30.06.2019 and therefore, he is apparently liable for imposition of penalty under the provisions of Section 171 (3A) of the above Act. However, perusal of the provisions of Section 171 (3A) under which penalty has been prescribed for the above violation shows that it has be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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