AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (11) TMI 1011
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....he Directorate General of Anti-Profiteering (DGAP) after detailed investigation under Rule 129 (6) of the Central Goods & Services Tax (CGST) Rules, 2017. The brief facts of the case are that two applications, both dated 21.02.2018, were filed by the Applicant No.1 before the Standing Committee constituted under Rule 123 (1) of the above Rules alleging that the Respondent had not passed on the benefit of reduction in the rate of tax, when she had bought 'Bathing Bar' and 'Instant Drink Powder 50 Gms.' (here-in-after referred to as the products) from the Respondent. It was also alleged by the Applicant No. 1 that these products were being sold at the MRP of Rs. 95/- and Rs. 50/- respectively, which had 12.5% Excise Duty & 14.....
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.....5% post implementation of GST from 14.5% VAT to 18% GST w.eJ 01.07.2017 and therefore, he had suffered loss in his margin on sale of both the products. 4. The DGAP has stated in his report that the Respondent had purchased the "Bathing Bar" from Mis Forever Body care Industries, Uttarakhand which was entitled to avail area based exemption from Central Excise Duty under Notification No. 50/2003-C.E. dated 10.06.2003 till 30.06.2017. The Respondent was also procuring the said "Instant Drink Powder 50 Gms." from Mis NCL Agro Foods, Rajkot which was eligible to avail the benefit of concessional Central Excise Duty @ 2% without Cenvat Credit under Notification NO.16/2012-C. E. dated 17.03.2012 before GST had come in to force. The VAT was appli....
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....pect of the Bathing Bar. 6. The DGAP has also intimated that when the sale of Bathing Bar in the pre-GST era was compared with the sale of it's new stock in GST regime, the Respondent's supplier MIs Forever Bodycare Industries had increased the transaction value of the Bathing Bar from Rs. 28.36 to Rs. 29.94. Therefore, an additionallTC of Rs. 0.28 had become available post GST to him. The DGAP has further intimated that taking in to account the transaction value of Rs. 29.94 and the ITC of Rs. 0.28 the cost price of the above product had increased from Rs. 28.64 to Rs. 29.94, but the Respondent had reduced his base price by Rs. 2.46 from Rs. 82.97 to Rs. 80.51, so that despite an increase in tax rate from 14.5% to 18%, the MRP ha....
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....t had reduced his base price by Rs. 1.30, from Rs. 43.67 to Rs. 42.37, so that inspite of the increase in the tax rate from 14.5% to 18%, the MRP had remained unchanged at Rs. 50/- and therefore, he had suffered a loss of Rs. 0.94 out of his gross margin. The DGAP has therefore, concluded that since the reduction in the base price was more than the additional lTC, the allegation of profiteering was not proved against the Respondent. 9. The DGAP has therefore, recommended that although the rate of tax had increased in respect of both the above products but the Respondent had reduced his base prices and the profit margins to maintain the same MRP inspite of the increase in the tax rate, therefore, The anti-profiteering provisions contained i....
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....as increase In the ITC of the above product w.e.f. 01.07.2017.? III. Whether there was any violation of the provisions of Section 171 of the CGST Act, 2017 by not passing on the benefit of tax reduction in this case? 13. Section 171 (1) of the CGST Act 2017 read as under:- (1). "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." 14. It is apparent from the perusal of the facts of the case narrated above that the actual pre-GST tax rate on the above products was not 27% (12.5%Excise Duty + 14.5% VAT), as had been mentioned by the Applicant No.1 in her applications, but it was 14.5% (Nil Central Excise Duty+ ....