TaxTMI 
TaxTMI 
2022 (8) TMI 530
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Act, Notification No. 19/2018 Central Tax (Rate) Dated 26.07.2018. 2. The DGAP in its report dated 02.09.2021, inter-alia, has stated that: i. The Standing Committee on Anti-profiteering examined the, application filed by the Applicant No. 1 in its meeting held on 19.08.2020, the minutes of which were received in DGAP on 15.10.2020, whereby it was decided to forward the same to the DGAP to conduct a detailed investigation in the matter. Accordingly, investigation was initiated to collect evidence necessary to determine whether the benefit of exemption of GST had been passed on by the Respondent to the Applicant No. 1 in respect of supply of Sanitary Napkins. ii. After receipt of the reference from the Standing Committee on Anti-profiteering, a Notice under Rule 129 of the Rules was issued by the DGAP on 09.11.2020 calling upon the Respondent to reply as to whether he admitted that the benefit of exemption of GST w.e.f. 27.07.2018 had not been passed on to his recipients by way of commensurate reduction in prices of sanitary napkins and if so, to suo-moto determine the quantum thereof and indicate the same in his reply to the notice as well as furnish all documents in support of....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Exchequer. b) The purchase details are as below:- Basic Purchase Price Rs.123.57 GST@12% Rs. 14,82 Purchase Value Rs. 138.39 MRP Rs. 155/- Margin on MRP 10.71% c) He was a small retailer and he was yet to receive confirmation from the Manufacturer regarding change of GST rate on Sanitary napkins and subsequently on all purchases thereafter, which were sold in due course. d) It was the manufacturer who follows change in GST rate at initial stage and Respondent sells the same as per the invoices raised to them. Government too puts and expects the manufacturers to pass on the benefit of exemption/reduction in GST to customer. As such Respondent had not received any benefit from the manufacturer which was to be passed on to the customer. e) Respondent had not charged the customer over the MRP fixed by supplier and earned 10.71% profit and collected GST was deposited with government not earning extra profit over it. f) There had been no sale under HSN Code 96190020 during the period. vi. Vide the aforementioned e-mails/letters, the Respondent also submitted the following documents/information (a) Drug License No. UP16200000126 and first sale w.e.f. 12.1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ate. This was the legally prescribed mechanism for passing on the benefit of ITC or reduction in rate of tax to the recipients under the GST regime and there was no other method which a supplier could adopt to pass on such benefits. xi. The Respondent, contended that "Stayfree Sanitary Napkin" as sold to the Applicant (MRP Rs. 155/-) was purchased vide invoice No. JJGST700409 dated 13.07.2017 by paying 12% GST, accordingly his billing system charged the same and deposited with the Government Exchequer. In this, regard it was observed that before 27.07.2018, the GST rate on supply of "Sanitary Napkins" was 12% and therefore the purchase muck by the Respondent by paying 12% GST appears to be within the confines of law. However. the intra-state supplies of 'Sanitary Napkins" was exempted from GST w.e.f. 27.07.2018. vide Notification No. 19/2018 Central Tax (Rate) Dated 26.07.2018., Hence, the supply of said "Stayfree Sanitary Napkin" made to the Applicant on 18.02.2019 by charging 12% GST does not appear to be in accordance with the provisions under the CGST Act, 2017, and therefore remedial measures as prescribed under the CGST Act, 2017 should have been taken recourse to before the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d each unit of the closing stock of "Stayfree Advanced XL 1* 14" at a total price of Rs. 155/- per unit (basic price of Rs.138.39/- plus GST @12%) of Rs.16.61/-). Hence it appears that the Respondent had increased the selling price by Rs. 1.78/- more than the aforesaid commensurate price of Rs.153.22/-. Hence the profiteering in respect of closing stock of 2 units of "Stayfree Advanced XL 1*14" sold by the Respondent in post rate reduction period appears to be Rs. 3.56/-. Further, the Respondent had not reversed the ITC on closing stock as per the provisions of Section 17 of the CGST Act. 2017 read with Rules 42 and 43 of the CGST Rules, 2017. Accordingly, the Respondent was liable for action under the provisions of the CGST Act. 2017 and the Rules made thereunder by the appropriate authority. xvi. During the post-rote reduction period (27.07.2018 to 31.10.2020), on the basis of data for exempted outward supplies of Sanitary. Napkins submitted by the Respondent, the profiteered amount was calculated on a sample consignment as Illustrated below: Invoice No. A 589 Invoice date B 07.04.2020 Item Name C WHISPER GREEN XL NORMAL 1*30 Quantity D 02 Units Rate per unit ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....its amounting to Rs. 2095.58/- as he did not have the details of the Customers to whom benefit was to be passed on. However, the Applicant No. 1 did not submit any submissions against the DGAP's report. 4. The proceedings in the mutter could not be completed by the Authority due to lack of required quorum of Members in the Authority during the period. 29.04.2021 till 23.02.2022 and the minimum quorum was restored only w.e.f. 23.02.2022. The matter was taken up for hitter proceedings vide Order dated 25.02.2022. 5. This Authority has carefully considered the Reports of the DGAP, submissions made by the Respondent and the case record. It is on record that Applicant No. 1 had filed a complaint alleging that the Respondent did not pass on the benefit of exemption of GST on Sanitary Napkins. vide Notification No. 19/2018 Central Tax (Rate) Dated 26.07.2018. by way of commensurate reduction in price, in terms of Section 171 of the Central Goods and Services Tax, Act, 2017. 6. Section 171 of the CGST Act provides as under:- "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 pri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er process at the level of State Government. 9. This Authority under Rule 133 (3) (a) of the CGST Rules, 2017 orders that the Respondent shall reduce the prices to be realized from the recipient commensurate with the benefit exemption received by him. 10. It is evident from the above narration of facts that Respondent has denied the benefit of exemption of GST w.e.f. 27.07.2018 on Sanitary, Napkins Section to the customers in-contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and he has thus committed an offence Under Section 171 (3A) of the above Act and therefore. he is liable for imposition of penalty under the provisions of the above Section. Section 171 (3A) of the CGST Act, 2017 has been inserted in the CGST Act, 2017 vide Section 112 of the Finance Act, 2019, and the same became operational w.e.f. 01.01.2020. As the period of investigation was 27.07.2018 to 31.10.2020, therefore, the Respondent is liable for imposition of penalty under the provisions of the above Section. Accordingly, notice be issued to him to explain why penalty as prescribed under Section 171 (3A) should not be imposed him. 11. The concerned jurisdictional CGST/SGST Commissioner i....