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GST : Where after reduction of GST rate, manufacturer/seller increased base price and maintained same MRP and, thus, had failed to maintain pre rate reduction base price and, thus, no benefit passed on to recipients/customers by way of commensurate reduction in selling price of product, respondent had profiteered and, hence, liable to penalty; benefit of tax reduction should be passed only by commensurate reduction in price and not by any other means such as discounts, etc.
• Respondent No. 1 was manufacturer and seller of aftershave lotion, etc. - Respondent No. 2 was distributor - Rate of GST was reduced from 28 per cent to 18 per cent vide Notification No. 41/2017-Central Tax (Rate), dated 14-11-2017 - It was alleged that benefit of tax reduction in GST rate was not passed on to recipients/customers by way of commensurate reduction in selling price of product as respondent-1 had kept MRP of product unchanged; thus, there was allegation of profiteering - However, respondent-1 claimed that it had passed on benefit as discount but could not produced any evidence to show that he had given said discount on account of passing on benefit of tax reduction; rather, respondent-1 had increased base price - Held, that respondent could not have increased base price and he had to maintain pre rate reduction base price - Since respondent-1 had profiteered, it was liable to penalty- Since respondent-2 had charged to his buyers by increasing his base price which had no connection with prices charged by respondent-1 to his buyers, by holding him profiteering, there would be no question of double computing of profiteered amount.