The National Anti-profiteering Authority (NAA) has confirmed the anti-profiteering charges against a distributor of the Johnson & Johnson ( J&J ) as it was found that the dealer failed to pass the GST Rate cut benefits to the consumers.
The NAA order was passed in a complaint filed against a distributor of the Johnson & Johnson on the ground that they had not passed on the benefit of GST rate reduction from 28 to 18 percent with effect from November 15, 2017, by maintaining the same Maximum Retail Price (MRP), which he was charging before the said date in case of the two products — Johnson & Johnson Baby Shampoo 100 ml and Johnson & Johnson Baby Powder 200 gm. The complainant alleged that instead of reduction, the base prices of these products were increased on November 15, 2017, and thus the said distributor had indulged in profiteering.
Before the authority, the distributor contended that the said billing was provided and fully controlled by J&J and he couldn’t make any modifications in the billing software and sold these products on the MRPs which were uploaded in the software. According to them, once the base prices had been increased by J&J with effect from November 15, 2017, in the software, he had no option except to charge these prices and therefore, he was not liable for profiteering.
However, J&J told the authority that it had in fact lowered the base prices after a reduction in the rate of tax from 28 to 18 percent.
After hearing rival contentions, the NAA held that held that there is no doubt that the distributor had increased the base prices of the above products from November 15, 2017, whereas he was required not to increase them and after charging GST 18 percent which meant he has indulged in profiteering.
The NAA also held that the distributor had also not produced any evidence to show that he had made any correspondence with J&J to inform it that he was bound to reduce the prices due to the reduction in the rate of tax and J&J should either not increase the base prices or compensate him for the benefit he was bound to pass on to his customers, therefore, it is quite apparent that he had deliberately charged the enhanced prices with an intention to pocket the amount which he was bound to pass on to the recipients. Accordingly, it was asked to deposit the profiteering amount of over Rs. 5 lakh, along with interest, with the consumer welfare fund.
Subscribe Taxscan Premium to view the Judgment
