2019 (2) TMI 293 - NAPA - GST

Alleged profiteering on 'Black Pepper' post-GST found unsubstantiated. No contravention of CGST Act Section 171.

Kerala State Screening Committee on Anit-Profiteeing, Director General Anti-Profiteering Versus M/s S.J Spices Ltd., Hill Produce Dealer, Kerala

The Kerala State Screening Committee alleged profiteering by the Respondent on the supply of 'Black Pepper' post-GST implementation. The DGAP's ... Profiteering - Black Pepper - benefit of reduction in the rate of tax not passed - Section 171 of Central Goods and Service Tax Act, 2017 - Held that:- It is clear from the perusal of the facts of the case that there was no reduction in the rate of tax on the above product w.e.f. 01.07.2017 and hence there is no contravention of the anti- profiteering provisions contained in Section 171 (1) of the CGST Act, 2017 - application filed by the Applicants is not sustainable in terms of Section 171 of the CGST Act, 2017 - application dismissed. Issues: Allegation of profiteering by the Respondent on the supply of 'Black Pepper' by not passing on the benefit of tax reduction post GST implementation.In this case, the Kerala State Screening Committee alleged profiteering by the Respondent on the supply of 'Black Pepper' due to not passing on the benefit of the tax rate reduction after the implementation of GST. The Committee referred the case to the Standing Committee on Anti-profiteering, which further directed the Directorate General of Anti-Profiteering (DGAP) to investigate under Rule 129 (1) of the CGST Rules, 2017. The DGAP's report highlighted that the pre-GST and post-GST invoices were issued by different entities, making a direct comparison impossible. It was noted that the tax rate on 'Black Pepper' remained the same post-GST implementation, and there was no contravention of Section 171 of the CGST Act, 2017, which mandates passing on tax benefits to consumers.The Authority considered the DGAP's report and observed that the core issue was whether there was a tax rate reduction and if Section 171 of the CGST Act, 2017 was applicable. Section 171 stipulates that any tax rate reduction should be passed on to consumers. However, in this case, as there was no reduction in the tax rate on 'Black Pepper' post-GST implementation, the anti-profiteering provisions were not violated. Therefore, the application filed by the Applicants was deemed unsustainable under Section 171 of the CGST Act, 2017. The order was to be shared with both the Applicants and the Respondent, and the case file was to be closed upon completion.