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TaxTMI 
TaxTMI 
TaxTMI 
2020 (3) TMI 557
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.... are that an application dated 05.02.2019 was filed before the Standing Committee on Anti-profiteering under Rule 128 of the CGST Rules, 2017, by the Applicant No. 1, against the Respondent alleging profiteering by the Respondent in respect of supply of "Bajaj Majesty MX 20 Steam Iron" (hereinafter referred to as the product). Applicant No. 1 further stated that the Respondent increased the MRP of the product from Rs. 1099/- to Rs. 1405/- or Rs. 1520/-, when the GST rate was reduced from 28% to 18% w.e.f. 27.07.2018, vide Notification No. 18/2018-Central Tax (Rate) dated 26.07.2018. Applicant No. 1 thus submitted that the Respondent did not pass on the benefit of reduction in the GST rate from 28% to 18% w.e.f. 27.07.2018 and instead, incre....
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....pleting the investigation which was extended by this Authority vide its order dated 19.06.2019 in terms of Rule 129 (6) of the CGST Rules, 2017. The period of the investigation is from 27.07.2018 to 31.03.2019. 6. The Respondent had replied to the Notice issued by the DGAP vide letters/e-mails dated 18.04.2019, 23.04.2019, 10.05.2019, 20.05.2019, 12.06.2019, 25.07.2019, 13.08.2019 and 03.09.2019 vide which he had stated that consequent to GST rate reduction w.e.f. 27.07.2018, the Respondent had reduced the MRP of the product from Rs. 1520/- to Rs. 1405/-. The Respondent had also submitted copies of the advertisement given by him in different newspapers in order to spread awareness regarding GST rate reduction on the goods. The Respondent....
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....and the second around the festival season of October-November every year. The Respondent had further increased the base price by Rs. 20/- in October, 2018 pursuing his business practice. The base price was also increased from January, 2018 on account of his business practice. The Respondent had also submitted the sample invoices in support of his claim. 8. The Respondent had also cited the order in the case of M/s Reckitt Benckiser India Pvt. Ltd. in WP (C) 7743/2019 = 2019 (7) TMI 1135 - DELHI HIGH COURT wherein the investigation had been limited to the complained that product only and also the amendment by which sub-Rule 5(a) had been inserted in Rule 133 of the CGST Rules, 2017 which contemplated that the Authority on the reason to be....
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....ted that Section 171(1) of the CGST Act, 2017 reads as follows - "any reduction in rate of tax on any supply of goods or services or the benefit of ITC shall be passed on to the recipient by way of commensurate reduction in prices." Thus, the legal requirement was abundantly clear that in the event of the benefit of ITC or reduction in the rate of tax, there must be a commensurate reduction in the prices of the goods or services. Such reduction could only be in terms of money, so that the final price payable by a recipient got reduced commensurate with the reduction in the tax rate or benefit of ITC. The DGAP also reported that this was the legally prescribed mechanism to pass on the benefit of ITC or reduction in the rate of tax to the ....
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....wever, the Respondent had increased the base price of the product from Rs. 676/- to Rs. 696/- in the month of October, 2018 as the Respondent's business practice was that of revising the base price of the product twice a year, once at the start of the year and second generally near October-November based on festival season. Thus, since there was no profiteering in the complained product, the scope of investigation had been limited to the product mentioned in the application only. The DGAP thus stated that the allegation of profiteering by Applicant No. 1 by way of increasing the base prices of the products w.e.f. 27.07.2018 was not sustainable against the Respondent and that Section 171(1) of the COST Act, 2017 has not been contravened.....
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....07.2018 and he had not passed on the benefit of reduction in the GST rate to the recipients. In this context, we have perused the invoices of the product dated 06.07.2018 and 03.08.2018, and we observe that the base price of the product was kept unchanged same by the Respondent despite the reduction in the rate of tax and that he did not increase the base price after coming into force of Notification No. 18/2018-Central Tax (Rate) dated 27.07.2018. 20. After examining the screenshots that were enclosed with the application, we observe that the MRP of Rs. 1099/- shown on the screenshot, pertained to the stock of the goods carrying an MRP of Rs. 1099/-, which was lying with the Respondent and that the Respondent has himself stated that onc....