TaxTMI 
TaxTMI 
2022 (7) TMI 1274
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....ondent did not reduce the selling price of the Power Bank "Portronics Power Slice 10", 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 remained the same at Rs. 1349/- and thus, the benefit of reduction in the GST rate was not passed on to the recipients by way of commensurate reduction in the price. The Applicant No. 1 along with his complaint also submitted copies of screen shots captured on the website "www.portronics.com". 2. The above reference was examined by the Standing Committee on Anti-profiteering and vides minutes of the meeting dated 22.03.2019, it was forwarded to the DGAP for detailed investigation in terms of Rule 129 of the above Rules. The period of the investigation was from 01.01.2019 to 31.03.2019 and relevant documents were called from the Respondent. 3. As regards the 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 impugned goods when the rate of GST was reduced from 28% to 18% w.e.f. 01.01.2019. The details of the impacted produ....
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.... 15 15 Mizoram 1515.23 16 16 Tripura 321.56 17 18 Assam 2159.96 18 19 West Bengal 14841.95 19 20 Jharkhand 3615.25 20 71 Orissa 7614.88 21 22 Chhattisgarh 4888.43 22 23 Madhya Pradesh 5916.69 23 24 Gujrat 18332.98 24 25 Maharashtra 77746.76 25 29 Karnataka 28305 28 26 30 Goa 2089.51 27 28 Kerala 7270.25 28 30 Tamil Nadu 33756.83 29 32 Pondicherry 823.35 30 35 Andaman & Nicobar islands 155.08 31 36 Telangana 22463.75 32 37 Andhra Pradesh(New) 15927.93 Grand Total 521965 6. The DGAP has concluded that the allegation of profiteering against the Respondent by way of increasing the base prices of the products w.e.f. 01.01.2019 was found sustainable and the details thereof were furnished in Annexure-15 of the Report dated 30.08.2019. The DGAP has elaborated that by increasing the base price of the goods supplied by him. subsequent to the reduction in the GST rate and by not passing on the commensurate benefit of the reduction in the GST rate from 28....
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....ied with the Report dated 30.08.2019 submitted by the DGAP to this Authority. As directed by this Authority, vide Para 29 of the I.O., vide letter dated 06.03.2020, the Respondent was requested to submit documents with respect to issues raised in Para 29 of the I.O. dated 27.02.2020, b. The period covered by the current investigation was same as was given in Investigation Report dated 30.08.2019, i.e. from 01.01.2019 to 31.03.2019. c. In response to the DGAP's letter dated 06.03.2020, the Respondent submitted his reply vide letters/e-mails dated 17.03.2020 and 24.08.2020, 21.09.2020, 22.09,2020 and 26.09.2020. Vide the aforementioned letters/e-mails; the Respondent submitted the following documents/information: i. Details of invoice-wise outward taxable supplies during the period November, 2018 to March, 2019 category wise reconciled with GSTR-1 and GSTR-3B returns. ii. Copy of Credit Note raised by the Respondent on the account of Sales returns. iii. GSTR-3B for the month of August, 2019 to September, 2019. d. As per the directions of NAA vide I.O. No. 12/2020, the DGAP initiated re-investigation of the case. During the period of earlier inv....
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....ST Rules, 2017 the Respondent was asked to reconcile the sales data submitted by him with the monthly return (GSTR-3B). The Respondent informed that in ease of Haryana GST return for the month of January, there was a difference of Rs. 2,76,349/-. As the reply was not supported by evidence at the time of investigation the issue was made part of the Investigation Report dated 30.08.2019. This Authority vide his I.O. directed to re-examine the issue. Accordingly, the Respondent was asked to clarify the same and the Respondent vide letters/mail dated 21.09.2020, 22.09.2020 & 26.09.2020 submitted his clarification and in this context he had also submitted GSTR-3B details for the month of August, 2019 & September, 2019 for Haryana and GSTR-9 for the financial year 2018-2019. The Respondent vide the above documents had submitted that the difference in GSTR-3B (Haryana) for the month of January 2019 had been adjusted in August, 2019 & September. 2019 and the total adjustments were reflected in his Annual Return (GSTR-9). In this context it was relevant to mention that profiteering was computed against the invoice wise sale of each product and all the invoices had been covered. Hen....
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....aras, g. The Respondent vide above submission informed that there were various channels/segment viz. Retail, Corporate, Distributor. Retail Wazirpur HO, Online, Online Distributor, Online Snapdeal, Online Paytm, Online Flipkart, Online Amazon. Online Shopclues, Online Udaan, Online P.O, LFR, Outlet RT and Online PAR. Accordingly the profiteering had to be calculated channel/segment wise. h. Accordingly, in the light of new facts and data, the issue that remained was die determination and quantification of profiteering by the Respondent for failure to pass on the benefit of the reduction in the rate of GST on the goods supplied to his recipients in terms of Section 171 of the CGST Act, 2017. From the invoices made available by the Respondent, it appeared that the Respondent increased the base price of the Power Bank when the rate of GST was reduced from 28% to 18% w.e.f. 01.01.2019, so that the commensurate benefit of GST rate reduction was not passed on to the recipients. On the basis of aforesaid pre and post-reduction GST rates and the details of outward taxable supplies (other than zero rated, nil rated and exempted supplies) of all products during the period 01.01.2019 to....
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....1 of CGST Act, 2017 was Rs. 96,354/-. The place (State or Union Territory) of supply-wise break-up of the total profiteered amount of Rs. 96,354/-was furnished in Table-D below: Table-D Sr. No State State Code Final Profiteering (in Rs.) 1 Jammu and Kashmir 1 526 2 Himachal Pradesh 2 710 3 Punjab 3 3436 4 Chandigarh 4 3134 5 Uttarakhand 5 1617 6 Haryana 6 2989 7 Delhi 7 20358 8 Rajasthan 8 562 9 Uttar Pradesh 9 13253 10 Bihar 10 536 11 Nagaland 13 60 12 Manipur 14 261 13 Mizoram 15 420 14 Tripura 16 3 15 Assam 18 451 16 West Bengal 19 2556 17 Jharkhand 20 46 18 Odisha 21 1392 19 Chhattisgarh 22 360 20 Madhya Pradesh 23 696 21 Gujarat 24 2800 22 Maharashtra 27 18446 23 Karnataka 29 5173 24 Goa 30 86 25 Kerala 32 1235 26 Tamil Nadu 33 9286 27 Telangana 36 3757 28 Andhra Pradesh 37 2207 Total 96,354/- 9. Therefo....
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.... the other material placed on record. On examining the various submissions the Authority finds that the following issues need to be addressed:- a. Whether there was any violation of the provisions of Section 171 of the CGST Act, 2017 in this case? b. if yes, then what was the quantum of profiteering? 13. Section 171 of the CGST Act provides as under:- "(1) Any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices. (2) The Central Government may, on recommendations of the Council, by notification, constitute an Authority, or empower an existing Authority constituted under any law for the time being in force, to examine whether input tax credits availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him. (3) The Authority referred to in sub-section (2) shall exercise such powers and discharge such functions as may be prescribed. (3A) Where the Authority referred to in sub-section (2) after ho....
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.... considered, If the sale of any particular model of the product/item was not found during that period then, in that case, the sales of that particular model of the product/item during previous months in a sequential manner beginning from November, 2018 had been considered to arrive at the base price of that product/item. Since the sales of all models of the product were not found during the period 01.12.2018 to 31.12.2018, therefore, the sales of that particular model of the product during the month of November. 2018 had been considered. the DGAP has thus calculated the profiteered amount on each particular model of product/item i.e. Power Bank. The mathematical methodology employed by the DGAP to compute the profiteered amount is correct, appropriate, reasonable and in consonance with the provisions of Section 171 (1) and the same has not been challenged by the Respondent. 16. Further, this Authority takes note of the fact that the Respondent has not submitted any objections against the allegations made in the DGAP's Rupert dated 09.11.2020. Therefore this Authority does not find any basis to differ from the findings of the DGAP that the Respondent had indeed contravened th....
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....aharashtra 27 9223.00 23 Karnataka 29 2586.50 24 Goa 30 43.00 25 Kerala 32 617.50 26 Tamil Nadu 33 4643.00 27 Telangana 36 1878.50 28 Andhra Pradesh 37 1103.50 Total 48,177/- 19. The above amounts shall be deposited into the concerned CWF along with interest @18% (from the date such amount was profiteered by them until the date such amount is deposited in the respective CWF) by the Respondent within a period of 3 months from the date of this Order failing which the same shall be recovered by the concerned Commissioner CGST/SGST/UTGST as per the provisions or the relevant GST Act, 2017. 20. It is further revealed that vide Section 112 of the Finance Act, 2019 specific penalty provisions have been added for violation of the provisions of Section 171 (1) which have come in to force w.e.f. 01.01.2020. by inserting Section 171 (3A). Since, no penalty provisions were in existence between the period from 01.01.2019 to 31.03.2019 when the Respondent had violated the provisions of Section 171 (1), the penalty prescribed under Section 171 (3A) cannot be imposed on the Respondent retr....