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Anti-profiteering provisions shall not apply if base price of product remains same even after reduction in GST rate

April 6, 2019[2019] 104 120 (NAA)

CGST : Whether where base price of product 'Vitrified Tiles Super Nano Plus' (HSN Code 69072100) per box was Rs. 294.50 (excluding GST) and had remained same even after GST rate reduction w.e.f 15-11-2017, benefit of rate of reduction appears to have been passed on and thus, allegation of profiteering was not sustainable - Held, yes [Para 11]

• Circular and Notification: Notification No. 41/2017-Central Tax(Rate) dated 14-11-2017

• The applicant No. 1- State Screening Committee on Anti-profiteering had referred the present case to the Standing Committee on Anti-profiteering, alleging profiteering by the respondent company on the supply of "Vitrified Tiles Super Nano Plus (HSN Code 69072100), by not passing on the benefit of reduction in the rate of tax w.e.f 15-11-2017, granted vide Notification No. 41/2017-Central Tax (Rate) dated 14-11-2017. It was therefore alleged that the respondent had indulged in profiteering in contravention of the provisions of section 171. In this regard, the applicant No. 1 had relied on two invoices issued by the respondent, invoice no. CST/577 dated 1-11-2017 issued in the pre-GST rate reduction period and invoice no. GST/742 dated 9-12-2017 issued in the Post-GST era.

• As could be seen from the invoices it was clear that the base price of the product per box was Rs. 294.50 prior to 15-11-2017 and had remained the same even after GST rate reduction w.e.f. 15-11-2017. Therefore, the benefit of rate reduction appears to have been passed on. Thus, allegation of profiteering was not sustainable. Hence, the provisions of section 171, have not been contravened and there was no merit in the application forwarded by the applicant No.1 and therefore the same was dismissed.

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