Applicability of Anti-Profiteering

[GST CMS]

Company is selling its MRP based product to its Distributor only. MRP of the product is say ₹ 1000 and he is selling this product to its Distributor @ ₹ 700+GST.

Now, there is Rate change from 28% to 18% so MRP of the product needs to be reduced. Company has reduced MRP of the Product to ₹ 925 commensurate with rate reduction but continue to apply selling price to Distributor same @ ₹ 700+GST only. Will Anti-Profiteering provision applicable to company who is not selling any product cum-tax that is who is not selling any product directly to end user including tax?

Please note that for company, Recipient is Distributor only and all are Registered in GST.

AI Summary

Anti-profiteering: suppliers must pass tax-rate benefits through the supply chain to the ultimate consumer, avoid base-price increases.
The statutory and regulatory expectation is that the benefit of a tax-rate reduction must be passed through the supply chain to the ultimate consumer; increasing or maintaining a supplier's base price following a rate reduction - even where MRP is adjusted or distributors are charged the same net price - is risky because regulators will assess whether consumers actually received the commensurate reduction in price.