TaxTMI 
TaxTMI 
2022 (5) TMI 631
X X X X Extracts X X X X
X X X X Extracts X X X X
....creen size upto 32 inches". The Applicant No. 1 alleged that the Respondent did not reduce the selling price of the "Monitors and TVs of screen size upto 32 inches", when the GST rate was reduced from 28% to 18% w.e.f. 01.01.2019, vide Notification No. 24/2018 Central Tax (Rate) dated 31.12.2018 and the price of the product was increased by the Respondent 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. The DGAP in its Report dated 28.02.2020, inter-alia stated that:- (i) The Applicant No. 1 relied upon two invoices issued by the Respondent as per the details contained in Table "A" below. Table-A S.No. Name of the product supplied Pre GST rate revision on 01.01.2019 Post GST rate revision on 01.01.2019 Difference in Base Price (Rs.) 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. Monitors and TVs of screen size upto 32 inches 1622 dated 09.12.2018 28% 10546.88 1914 dated 03.02.2019 18% ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l documents/reply furnished by the Respondent on 16.01.2020 to 17.01.2020, which the Applicant did not avail of. (ix) The subject application, the various replies of the Respondent and the documents/evidences on record had been carefully examined. The main issues for determination was whether the rate of GST on the "Intex LED TV-3224HD" supplied by the Respondent was reduced from 28% to 18% w.e.f. 01.01.2019 and if so, whether the benefit of such reduction in the rate of GST had been passed on by the Respondent to his recipients, in terms of Section 171 of the CGST Act, 2017. (x) The Central Government, on the recommendation of the GST Council, had reduced the GST rate on the "Monitors and TVs of screen size upto 32 inches" (HSN-8528) from 28% to 18% w.e.f. 01.01.2019, vide Notification No. 24/2018-Central Tax (Rate) dated 31.12.2018. As per the invoice of the Respondent the products Intex LED TV-3224HD fall under HSN 8528. This being a matter of fact which was not disputed by the Respondent, it could be concluded that the GST rates were indeed reduced in the manner stated above. (xi) Section 171 (1) of the CGST Act, 2017 read as any reduction in rate of tax on any supply of goo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....4.54 From the above table, it was clear that the Respondent did not reduce the selling price of the "TV-3224HD", when the GST rate was reduced from 28% to 18% w.e.f. 01.01.2019, vide Notification No. 24/2018 Central Tax (Rate) dated 31.12.2018 and hence profiteered an amount of Rs. 2554.53/- on this particular item 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. On the basis of above calculation as illustrated in table B above, profiteering in case of all impacted goods of the Respondent i.e., Monitors and TVs of screen size upto 32 inches had also been arrived in similar way. However, the average base price for other items/types of Monitors and TVs of screen size upto 32 inches would be different from the item as shown in Table-B above and accordingly, profiteering had been calculated item-wise. (xiv)As regards the total amount of profiteering made in this case, perusal of the invoices made available by the Respondent indicated that the Respondent had increased the base price of the "Monitors and TVs of screen size upto 32 inches" when the rate of GST w....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... been contravened in the present case. 3. The investigation Report submitted by the DGAP was received by this Authority on 03.031020 and it was decided to accord an opportunity of hearing to the Applicants and the Respondent on 24.03.2020. Notice dated 05.03.2020 was also issued to the Respondent directing him to explain why the Report dated 28.02.2020 furnished by the DGAP should not be accepted and his liability for violation of the provisions of Section 171 of the CGST Act, 2017 should not be fixed. But, in the wake of the Corona pandemic and subsequent lockdowns in Delhi, the hearing scheduled on 24.03.2020 could not be held. 4. Vide e-mail dated 01.06.2020, the Respondent has submitted that he agreed with the DGAP's Report dated 28.02.2020 and had deposited the profiteered amount i.e. Rs. 4,699/- in the Consumer Welfare Funds (CWFs) and to support his claim he has furnished the copy of the Demand Draft No. 090392 for Rs. 4,699/- dated 18.05.2020. Vide letter dated 24.08.2020, the Respondent has submitted that he has voluntarily paid the interest amount of Rs. 1500/- in the Consumer Welfare Funds (CWFs) and also furnished copy of the Demand Draft No. 090400 for Rs. 1500/-....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssing on the benefit of reduction in the rate of tax and the second about the passing on the benefit of the ITC. On the issue of reduction in the tax rate, it is apparent from the record that there has been a reduction in the rate of tax from 28% to 18% on "Monitors and TVs of screen size upto 32 inches" w.e.f. 01.01,2019, vide Notification No. 24/2018-C.T.(Rate) dated 31.12.2018. Therefore, the Respondent is liable to pass on the benefit of the above tax rate reduction to his customers in terms of Section 171 (1) of the above Act, It is also apparent that the DGAP has carried out the present investigation w.e.f. 01.01.2019 to 30.06.2019. 10. It is also evident that for computing the profiteered amount the DGAP has calculated item-wise profiteering during the pre rate reduction period and calculated the average base price (without GST) of particular item by dividing the total taxable value with the total quantity of that item sold. He has compared the average pre rate reduction base price of the item with the actual selling prices of that item sold during the post reduction period i.e. after 01.01.2019 and assessed the profiteered amount on particular item. The mathematical method....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntarily paid the interest amount of Rs. 1500/-. However, the same has not been verified by the DGAP. Accordingly, the DGAP is directed to ensure that the interest, at the applicable rate, is paid by the Respondent and submit his report confirming payment of the interest within three months of this Order. 15. It is evident from the above that the Respondent has contravened the provisions of Section 171 (1) of the CGST Act, 2017. However, since, the penalty prescribed under Section 171 (3A) of the CGST Act, 2017 for violation of the above provisions has come in to force w.e.f. 01.01.2020 and the infringement pertains to the period from 01.01.2019 to 30.06.2019 and the Respondent has also deposited the profiteered amount along with the interest therefore, no penalty is proposed to be imposed on the Respondent. 16. As per the provisions of Rule 133 (1) of the CGST Rules, 2017 this Order was required to be passed within a period of 6 months from the date of receipt of the Report from the DGAP under Rule 129 (6) of the above Rules. Since, the present Report has been received by this Authority on 03.03.2020 the Order was to be passed on or before 02.09.2020. However, due to prevalent pa....