The National Anti-Profiteering Authority (NAA) in the case of Kerala State Screening Committee on Anti-Profiteering v. M/s. Dev Snacks held the respondent liable for anti-profiteering and for issuing incorrect tax invoices in contravention of Section 122 of the Goods and Services Tax Act (GST).
The application alleging profiteering was forwarded to the Standing Committee against the Respondent on the supply of “Snacks” by not passing on the benefit of reduction in the rate of tax from 12% to 5% after the imposition of Goods and Services Tax. The application was scrutinized by the Standing Committee on Anti Profiteering followed by an investigation by DGAP, who further called upon the Respondent to submit his reply on the allegation.
It was contended by the respondent that the reduced GST @5% was chargeable only for a duration of 35 days after the introduction of GST; That according to the new law, certain items being sold in unit containers and having a registered brand name or bearing a brand name which is an actionable claim, would attract a rate of 12% and others would be liable to a GST of 5%. The respondent had stated that non clarity of the import notification led him to pay GST @ 5% and after getting clarification regarding the same and consequently a brand registration, he started paying 12% as GST.
The DGAP relying upon the invoices held that the Respondent had increased the base prices of the Snacks after the rate of tax was reduced and charged GST wrongly when the effective rate was Nil and was liable for not passing the benefit of rate reduction to his customers for the period of 35 days.
The Authority held contrary to respondent’s contention that the GST applicable on the product sold by him was 5%, the actual rate applicable on him was Nil due to his voluntary foregoing of his actionable claim of his unregistered brand name. The Respondent was held in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and is directed to deposit the profiteered amount of Rs. 6,38,153 along with interest to be calculated @18% from the date from which the above amount was collected by him.
Additionally, he was held liable to issue incorrect tax invoices under Section 122(1)(i) compelling the buyers to pay additional GST although they were not required to pay it. However, the matter shall be heard separately and notice has been granted to explain reasons for the same.
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