The National Anti-profiteering Authority ( NAA ) has confirmed the anti-profiteering charges against the dealer of “Maybelline FIT Me foundation” product for not passing the GST benefits to the consumers.
The applicant approached the anti-profiteering authority with a grievance that the respondent has not passed on the benefit of reduced rate of GST while purchasing Maybelline FIT Me foundation from him. It was said that the tax on the same was reduced from 28% to 18% on this product on 15.11.2017.
The Respondent contended that the MRP label of the product provided by the applicant was from the pre-GST stock which was imported in March, 2017 and hence, it did not factor the GST in it’s price. According to him, in respect of the external brands he was dependent on the respective brand owner and the MRP and the retail selling price should have been revised by the brand owners. He also opposed the extension of scope of investigation to pan-India registrations and sales of the product.
After investigation, the DGAP found that though the Respondent had no direct influence over the revision of MRP of external brands but still he was liable to revise his retail selling price as he had taken the benefit of Input Tax Credit (ITC) on the purchase of the product, therefore he was required to reduce the Retail Selling Price (RSP) to pass on the benefit of reduction in the rate of GST from 28% to 18% w.e.f. 15.11.2017 to his customers.
After hearing both the sides, the NAA came to a conclusion that the Respondent had enhanced the basic price of both the shades of the product which was exactly equal to the amount by which the GST on them had been reduced and hence there is no doubt that the Respondent had resorted to profiteering.
“It is also established that the Respondent had issued incorrect invoices while selling the product to his customers as he had not correctly shown the basic price which he should have legally charged from them which is an offence under Section 122 (1) (i) of the CGST Act, 2017 and hence he is liable for imposition of penalty under the above Section,” the authority said.
“The Respondent cannot claim that since the amount of profiteering was miniscule no penalty should be imposed as each breach of the law has to be visited penalty,” the authority added.
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