TaxTMI 
TaxTMI 
TaxTMI 
2020 (8) TMI 91
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.... selling price of the product when the GST rate was reduced from 28% to 18% w.e.f. 15.11.2017, vide Notification No. 41/2017-Central Tax (Rate) dated 14.11.2017 and the price of the product remained the same and thus the benefit of reduction in GST rate was not passed on to the recipients by way of commensurate reduction in the price, in terms of Section 171 of the CGST Act, 2017. 2. Applicant No. 1 had relied upon two invoices issued by the Respondent as per the details contained in the table given below:- Table S.No. Name of the product supplied Pre-GST rate revision on 15.11.2017 Post GST rate revision on 15.11.2017 The difference in INR Invoice No. & Date GST rate (%) Price excluding GST (Base Price) Invoice No. & Date GST rate (%) Price excluding GST (Base Price) A B C D E F G H I=H-E 1. Dura Cell R004221 dated 01.11.2017 28% 548.44 for 4 Pcs.=137.11 R-004826 dated 15.11.2017 18% 148.73 11.62 3. The Standing Committee on Anti-profiteering examined the aforesaid reference in its meeting and forwarded the same to the DGAP for detailed investigation in terms of Rule 129 of the Rules. 4. The DGAP on receipt of the appli....
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....oods 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 gets correspondingly in absolute terms reduced commensurate with the reduction in the tax rate or benefit of input tax credit (ITC). This was the only legally prescribed mechanism to pass on the benefit of ITC or reduction in the rate of tax to the recipients under the GST regime and there was no other method that a supplier could adopt to pass on such benefits. 10. The DGAP also stated that to determine as to whether the Respondent had commensurately reduced the price of the products supplied by him in terms of Section 171 of Central Goods & Services Tax Act, 2017, the details of supply of all products were analysed and it was observed that the base prices of most of the products supplied by the Respondent had been increased by him despite the reduction in the tax rate whic....
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....rns with the turnover of Duracell battery reported in his submissions. The Respondent vide email dated 11.12.2019 submitted HSN wise turnover from November 2017 to March 2017 and informed that the difference in the sale of Duracell battery amounting to Rs. 1,40,880/- had been reconciled in his annual return. 12. The DGAP has observed that perusal of the invoices made available by the Respondent indicated that the Respondent had increased the base price of the product when the rate of GST was reduced from 28% to 18% w.e.f. 15.11.2017. Based on the aforesaid, pre and post-reduction GST rates and the details of outward taxable supplies (other than zero-rated, nil rated and exempted supplies) of the product during the period 15.11.2017 to 30.06.2019, as furnished by the Respondent, the amount of net higher sales realization due to increase in the base price of the impacted good, despite the reduction in the GST rate from 28% to 18% or in other words, the profiteered amount comes to Rs. 1,57,200/-. The DGAP also furnished the details of the computation of the profiteered amount in the Annex-12 of his Report. The profiteered amount has been arrived at by comparing the average of the bas....
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....DGAP vide letter dated 19.03.2020 submitted that the Deputy Director, Rajasthan Government has informed vide letter dated 04.03.2020 that payment of amount vide demand draft No. 1452728 dated 21.01.2020 for Rs. 98,585/- of Allahabad Bank has been deposited in the account of Consumer Affairs Department, Rajasthan vide P.D. Account No. 3980 dated 29.01.2020 by the Respondent. The DGAP vide letter dated 25.06.2020 stated that Sr. Accounts Officer Pay and Accounts Office, Department of Consumer Affairs, vide letter dated 19.06.2020 has confirmed the receipt of payment of the above-mentioned amount. 19. We have carefully considered the Reports filed by the DGAP, submissions of the Respondent, and other material placed on record and it has been revealed that the Central Government, on the recommendation of the GST Council, had reduced the GST rate on the "primary cells & primary Battery" (HSN-8506) from 28% to 18% w.e.f. 15.11.2017, vide Notification No. 41/2017-Central Tax (Rate) dated 14.11.2017, the benefit of the same was required to be passed on to the recipients by the Respondent as per the provisions of Section 171 of the CGST Act, 2017. 20. From the above facts and discussion, ....