GST: NAA didn’t impose Penalty for denying benefit of ITC for Nestle Munch & Cadbury Dairy Milk as no penalty provisions existed [Read Order]

The National Anti-Profiteering Authority (NAA) found M/s Harish Bakers and Confectioners Private Limited guilty of profiteering but did not impose the penalty for denying the benefit of Input Tax Credit (ITC) as no penalty provisions existed when the ITC was denied.

The Applicant, Pushpak Chauhan, alleged profiteering against the respondent, M/s Harish Bakers and Confectioners Private Limited and submitter that the respondent had not passed on the benefit of Input tax Credit (ITC) to the Applicant from 28% to 18% in respect of the two products viz. the Nestle Munch Nuts 32 Gram Chocolate and the Cadbury Dairy Milk Chocolate with effect from November 15, 2017, as per the provisions of Section 171 (1) of the CGST Act, 2017.

The DGAP in his report had also submitted that the Respondent had denied the benefit of ITC to the buyers amounting to Rs.Rs. 15,958 pertaining to the period with effect from November 15, 2017, to March 31, 2018, and had thus indulged in profiteering and violation of the provisions of Section 171 (1) of the Act.

The Authority headed by the Chairman Dr. B.N. Sharma held that the Respondent has not passed on the benefit of ITC when the GST rate was reduced from 28% to 18% on the above products with effect from November 15, 2017, to the buyers which he was required to pass to the consumers.

“Accordingly, the notice dated 01.01.2019 issued to the Respondent for the imposition of penalty under Section 122(1)(i) is hereby withdrawn and the present penalty proceedings launched against him are accordingly dropped,” the NAA said.