TaxTMI 
TaxTMI 
2024 (9) TMI 376
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....o 18% w.e.f. 15.11.2017, vide Notification No. 41/2017-Central Tax (Rate) dated 14.11.2017 by not reducing the prices commensurately, in terms of Section 171 of the CGST Act, 2017. ii. On the basis of above, the DGAP had investigated the matter and submitted an Investigation Report dated 23.03.2020 under Rule 129 (6) of the CGST Rules, 2017 to the National Anti-Profiteering Authority (NAA) which is now Competition Commission of India (CCI). The NAA went through the aforesaid Investigation Report dated 23.03.2020 submitted by the DGAP and passed Final Order No. 07/2022 dated 10.05.2022. Vide said Order, the NAA directed the DGAP to investigate the entire chain of the suppliers of M/s. S.R. Lifesciences, under Rule 133 (5) of the CGST Rules, 2017. On the basis of the Order dated 07/2022 dated 10.05.2022, the DGAP had investigated the matter and submitted an Investigation Report dated 31.08.2022 under Rule 133 (5) of the CGST Rules, 2017 to the NAA. iii. The Commission went through the aforesaid Investigation Report dated 31.08.2022 submitted by the DGAP and passed Interim Order No. 03/2023 dated 31.07.2023. Vide Para-6 & 7 of the aforesaid Order, the CCI found that:....
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....is reply to the Notice as well as furnish all the supporting documents. vi. As per the Notice for Initiation of Investigation dated 09.08.2023 issued to the Respondent the period covered by the current investigation was from 15.1 1.2017 to 31.07.2023. However, Respondent submitted that he had discontinued the product "Eclat Serum 30gm" in 2019 and upgraded to new version, hence, there was no sale of the above product after 08.07.2019. Accordingly, the investigation period in respect of this Report was upto 08.07.2019. vii. The Respondent vide letters/e-mails dated 24.08.2023, 01.09.2023, 04.09.2023, 22.09.2023, 02.10.2023, 11.10.2023, 19.10.2023, 03.11.2023, 24.11.2023, 06.12.2023, 08.12.2023, 26.12.2023, 02.01.2024, 08.01.2024 and 26.03.2024 has filed his submissions before the DGAP during investigation. viii. The DGAP has stated that he has examined the above application, various replies of the Respondent and the documents/evidences on record. The main issues for determination were: - a) Whether the rate of GST on the products supplied by the Respondent was reduced from 28% to 18% w.e.f. 15.11.2017 and if so, b) Whether such benefit of....
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....Pre-Rate Reduction (From 01.11.2017 to 14.11.2017) Post Rate Reduction (From 15.11.2017 to 08.07.2019) 1. Product Description A Eclat Serum 30GM 2. Notification No. B 41/2017-Central Tax (Rate) dated 14.11 .2017 4. Total quantity of item sold C 17 5. Total taxable value D 7342 6. Average base price (without GST) E=D/C 432 7. GST Rate F 28% 18% 8. Commensurate Selling price (post Rate reduction-with GST) G=E*1.18 510 7. Invoice No. H GST-0299, GST-0300, GST-0322, GST-0326 0378, 0665, 0715 8. Invoice Date I 02.11 .2017, 02.11 .2017, 10.11.2017, 10.11.2017, 04.12.2017, 14.02.2018, 28.02.2018 9. Total Billed quantity (above invoice) J 1050 10. Total Invoice Value K 216825 11. Actual Selling price per unit (post rate reduction-with GST) L=K/J 206.5 12. Excess amount charged or profiteering M=L-G -303.5 13 Total Profiteering N=M*J - xiii. The DGAP has observed from the above table that the Respondent in the case of M/S. S....
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....the impacted products 113 Rs. 2,06,100/- xv. 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 the impacted goods during the period 15.11.2017 to 31.07.2023 (however, the same was restricted to 08.07.2019), as furnished by the Respondent the amount of net higher sales realization due to increase in the base prices of the impacted goods, despite the reduction in the GST rate from 28% to 18% or in other words, the profiteered amount came to Rs. 2,06, 100/- (as shown in Table-C above). The details of the computation have been given by the DGAP in Annexure-20 of his Report dated 30.04.2024. xvi. The recipients along with the place (State or Union Territory) of supply wise breakup of the total profiteered amount of Rs. 2,06,100/- was furnished in Table-D below: - Table-D ECLAT SERUM 30GM (15.11.2017 to 08.07.2019) S.No. State Code Place of Supply Customer Name Profiteering 1 3 Punjab MAMTA-MOHALI MOHALI 1 ,340 Total 1,340 2 6 Haryana PRARTHNA DWIVEDI FARIDABAD) 989 QRG CENTRAL HOSPITAL ....
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....RABAD) 989 NAVEEN YELL-AMATI (HYDERABAD) 1 978 PRIYANKA-HYDERABAD (HYDERABAD) 1,961 LINGAM VIJAYWADA 989 SOPHIYA SYED GUNTUR 3,957 SPOORTHI REDDY (HYDERABAD) 989 SRI RAMA MEDICAL & GEN STORES (HYDERABAD) 4,227 SRILATHA B (HYDERABAD) 989 Total 24,484 12 29 Karnataka AMAZON SELLER (BANGALORE) 8,392 GM. JABEER (BENGALARU) 989 VAAMSI KRISHNA (BANGALORE) 3,122 VISHAL BHAWSINGHKA (BANGALORE) 989 Total 13,493 13 36 Telangana VASUMATHI REDDY ARANGA 989 VASUMATHI REDDY (WARANGAL) 1 ,978 Total 2,968 GRAND TOTAL 2,06,100 xvii. The DGAP has concluded that the base prices of the impugned goods were increased when there was a reduction in the GST rate from 28% to 18% w.e.f. 15.11.2017, so that the benefit of such reduction in GST rate was not passed on to the recipients by way of commensurate reduction in prices. The DGAP has stated that the allegation of profiteering by way of increasing the base prices of the products w.e.f. 15.11.2017 was sustainable against the Respondent. Thus, by increasing the base prices of the goods subsequen....
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.... as Rs. 2,06,100/- as per the provisions of Rule 133 (1) of the CGST Rules 2017. The details of the computation have been given by the DGAP in Annexure-20 of his Report dated 30.04.2024. Since the recipients in this case, are identifiable as given in Table-D above, the Respondent is required to pass on the profiteered amount of Rs. 2,06,100/- along with the interest to be calculated @ 18% from the date when the above amount was collected by him from the recipients till the above amount is passed on/paid in terms of Rule 133 (3) (b) of the CGST Rules, 2017. 7. The above amount shall be paid within a period of 3 months from the date of this Order failing which the same shall be recovered by the Commissioner CGST/SGST as per the provisions of the CGST Act, 2017. 8. It is also evident from the above narration of facts that the Respondent has denied benefit of rate reduction to his customers/recipients in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and has committed an offence under Section 171 (3A) of the above Act. However, perusal of the provisions of Section 171 (3A), under which liability for penalty arises for the above violation, shows that it h....