TaxTMI 
TaxTMI 
2019 (5) TMI 783
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....ndent ORDER 1. The present Report dated 05.12.2018 has been received from the Applicant No. 2 i.e. the Director General of Anti-Profiteering (DGAP) under Rule 129 (6) of the Central Goods & Service Tax (CGST) Rules, 2017. The facts of the case are that the Kerala State Screening Committee on Anti-Profiteering, vide minutes of its meeting held on 08.05.2018, had referred the instant matter to the Standing Committee on Anti-profiteering, alleging profiteering by the Respondent on the supply of "luggage trolley bag/suitcases", namely "Tropic 45 Weekender Black" and "Neolite Strolly 53 360(VlP) FIR" (hereinafter referred to as "the products"), as the benefit of reduction in the rate of tax of GST w.e.f. 15.11.2017 had not been passed on b....
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....t, the DGAP has reported that the Respondent had submitted replies to the DGAP vide his letters dated 28.09.2018 and 05.10.2018 and 22.10.2018 where he had stated that as distributor of the company's (VIP) products, he followed the company's pricing structure and that his distributor's margin had remained unchanged in the pre and post GST periods, even when the rate of GST was reduced from 28% to 18% ad-valorem and he never enjoyed any additional benefits in respect of his supplies. The Respondent also submitted that along with other suppliers of luggage items he had represented before the Government of India seeking reduction in the GST rate as the tax burden on the industry had increased in the post-GST era as compared to the ....
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.... the base price of the products "Tropic 45 Weekender Black" and "Neolite strolly 53 360(VIP) FIR" when GST rate on the said products was reduced from 28% to 18%, which implied that the commensurate benefit of rate reduction was not passed on to the recipients by the Respondent. 7, The DGAP has further reported that investigation further revealed that the amount so profiteered by the Respondent in respect of supplies of the products during the period 15.11.2017 to 31.08.2018, worked out to Rs. 18,887/-, the details of which are as below:- Goods/Services Description HSN Base price per unit pre 15.11.2017 base price per unit post 15.11.2017 Qty sold after 15.11.2017 Rate of GST Actual Selling price per unit Commensurate....
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....h was later reduced to 18% on 15^th November, 2017 on account of representations by the trade. The Respondent has contended that in the period after 01.07.2017, when the rate of tax was increased to 28%, he had not increased the prices of the products and had absorbed the additional cost arising on account of implementation of GST. The Respondent further averred that the reduction in the GST rate w.e.f 15.11.2017 from 28% to 18%, had only corrected the excessive tax burden which was borne by him since 01.07 2017 due to GST implementation and that reduction of tax rate was merely a corrector w.e.f 15.11.2017 and thus the question of passing on the benefit of this tax rate change to the recipients did not arise. He added that the said reducti....
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....s of the products supplied by the Respondent when GST rate on the products was reduced from 28% to 18% w.e.f. 15.11.2017. 13. We have carefully considered the Report of the DGAP contention of the Applicant No. 1 and the submissions made by the Respondent as also the documents placed on record to consider whether there was any reduction in the rate of tax in the relevant period and whether the benefit of reduction in the rate of tax was passed on to the recipients as required under Section 171 of the CGST Act, 2017. 14. From the facts of the case and the records placed before us, we find it evident that the Respondent had increased the base prices of his products w.e.f. 15.11.2017 despite reduction in the rate of GST from 28% to 18%. T....
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.....39 Rs. 2199.83 Rs. 88.56 Rs. 177 Total Rs. 18887 We find that the methodology and the profiteered amount calculated by the DGAP, as shown in the above table, is correct and accordingly direct the Respondent to reduce the prices of the above products commensurate with the reduction in the rate of tax to ensure that the benefit is passed on to the recipients. The Respondent is further directed to deposit the profiteered amount of Rs. 18,887/- along with the interest to be calculated @ 18% from the date when the above amount was collected by him from the recipients till the above amount is deposited. Since the recipients in this case are not identifiable, the Respondent is directed to deposit the amount of profiteering of Rs....