TaxTMI 
TaxTMI 
2018 (12) TMI 472
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....rnments w.e.f. 15.11.2017 by maintaining the same Maximum Retail Prices (MRPs) which he was charging before the above date, in case of the two products namely (i) Johnson & Johnson Baby Shampoo 100 ml. and (ii) Johnson & Johnson Baby Powder 200 Gms. (here-in-after referred to as the products). It was also alleged that instead of reduction. the base prices of the above two products were increased on and thus the Respondent had indulged in profiteering in contravention of the provisions of Section 171 of the CGST Act, 2017 and hence appropriate action should be taken against him, In this connection, the details of 2 Tax Invoices issued by the Respondent in respect of the above two products were also enclosed by the DGAP with his Report as under:- S.No. Invoice No. and Date Description of Products Base Price (Rs.) Rate of GST Price Charged of Inclusive of GST (Rs.) 1. JJGST1707093 12.10.2017 Baby Shampoo 100 ml. 57.24 28% 73.27 Baby Powder 200 Gms. 80.82 28% 103.45 2. JJGST1709322 16.11.2017 Baby Shampoo 100 ml. 62.10 18% 73.28 Baby Powder 200 Gms. 87.67 18% 103.45 2. The DGAP had call....
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....fit of reduction in the rate of GST to his customers immediately w.e.f. 15.11.2017. 5. The DGAP has also submitted that by increasing the base prices of the above products and having maintained the pre-GST rate reduction MRPs, the benefit of GST rate reduction was not passed on to the customers by the Respondent. 6. The DGAP has also stated that from the Price Lists submitted by the Respondent, it was revealed that he had raised the base prices of both the above products during the period between 15.11.2017 to 18.11.2017. He has also informed that the base price of Baby Shampoo 100 ml. was increased from Rs. 5724/- to Rs. 62.10/- and the same was increased in respect of Baby Powder 200 Gms., from Rs. 80.82/- to Rs. 87.67/-, 7. The DGAP has also observed that during the period from 19.11.2017 to 31.03.2018, the Respondent had re-fixed the base price of Baby Powder 200 Gms. from RSA 80.82/- to Rs. 86.21/- which was slightly lower than the price prevalent between 15.11.2017 to 18.11.2017 and the base price of Baby Shampoo 100 ml. was re-fixed from Rs. 57.24- to Rs. 58.44/- which was also slightly lower than the price between 15.11.2017 to 18.112017, however, still both the ba....
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....r than the Manual, and any online or electronic documentation. He has also claimed that the contract also required him not to use the above software in case he did not agree to the terms of the above agreement. The Respondent has also maintained that the contract stated that the ownership of the licensed software at all times would be with J & J. He has further alleged that through this agreement, he had been given a very limited right of using the software solely for the business of the above company and take prior consent of the concerned officer in case he wanted to use this software for any other business. He has also claimed that the title and full ownership rights of the above software were with J & J and he was required to handover the above software to J & J in case of termination of the agreement. Therefore, he has claimed that once the base prices had been increased by J & J with effect from 15.11.2017 in the software, he had no option except to charge these prices and therefore, he was not liable for profiteering, He had also supplied copies of the invoices issued by J & J to him to establish that the base prices had been changed by the above Company with effect from 15.....
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....ax from to 28% to 18%. It had also submitted the details of the base prices, tax and the invoice prices from J & J to the Distributor, from the Distributor to the Retailer and from the Retailer to the consumer upto 14.11.2017, and from 17.11.2017 onwards as per the table given below:- JB Powder 200 Gms, Monsoon Particular J&J to Distributor Distributor to Retailer Retailer to consumers Upto 14 November 2017 17^th November onwards Upto 14 November 2017 17th November onwards Upto 14 November 2017 17th November onwards Base Price 74.76 79.74 80.82 86.21 93.75 100.00 Tax 20.93 14.35 22.63 15.52 26.25 18.00 Invoice Price 95.69 94.09 103.45 101.72 120.00 118.00 JB NMT Shampoo (TBP) 100 ml. Particular J&J to Distributor Distributor to Retailer Retailer to consumers Upto 14 November 2017 17^th November onwards Upto 14 November 2017 17th November onwards Upto 14 November 2017 17th November onwards Base Price 52.95 54.06 57.25 58.45 66.41 67.80 Tax 14.83 9.73 16.03 10.52 18.59 12.20 Invoice Price 67.78 63....
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....e Respondent had increased the base prices of 130 products which were supplied by him during the period between 15.11.2017 to 31.032018 and by doing so he had resorted to profiteering to the tune of Re. on account of increase in their base prices, Thus, it is established that the Respondent had acted in contravention of the provisions of Section 171 of the CGST Act. 2017 and had not passed on the benefit to his customers by commensurate reduction in the prices of these products. Accordingly, the amount of profiteering made by the Respondent is determined as Rs. 501 ,646/- as per the provisions of Rule 133 (1) of the CGST Rules, 2017. 18. The Respondent has vehemently argued that he had no control on the fixing of the base prices as well as the MRPs as both of them were fixed by J & J through the software which he was bound to follow as per the terms of the agreement executed by him with the above Company, However, it is apparent from the record that the Respondent is duly registered under the CGST/SGST Act, 2017 and he was hence bound to follow the Notification dated 14.11.2017 mentioned above vide which the rate of GST was reduced from 28% to 18% on 130 products which he was se....
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....ad not misused the ITC and he was willing to pay the balance tax if any and no penalty should be imposed on him. However, it is apparent from the record that the Respondent had increased the base prices illegally and also forced his customers to pay additional GST on the increased prices otherwise there would have been further reduction in the prices and hence he has acted in violation of the provisions of Section 171 of the above Act. 22. J & J through it's submissions dated 28.09.2018 has claimed that it had reduced the basic prices on all it's products including the above 2 products w.e.f. 15.11.2017 and had charged the reduced prices from it's distributors who had further charged the reduced prices from the retailers and who had resultantly sold it's products to the consumers on the reduced MRPs. However, this contention of J & J is not correct as per the details supplied by it and hence the same cannot be accepted. 23. Accordingly, the Respondent is directed to reduce the prices of all the above products as per the provisions of Rule 133 (3) (a) of the CGST Rules, 2017 by making commensurate reduction in their prices keeping in view the reduction in the rate of tax so th....