Wednesday, August 12, 2020
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Kerala-based Distributor found guilty of GST Anti-Profiteering Charges [Read Order]

By Taxscan Team -

The National Anti-profiteering Authority (NAA) has held that the Kerala-based distributor Win Win Appliances guilty of profiteering Rs 32,926 by not passing on GST rate cut benefit to customers.

The complainant alleged that the respondent, Win Win Appliances has not reduced the price of mixer-grinder commensurate with the reduction of the Goods and Services Tax (GST) from 28 per cent to 12 per cent with effect from November 15, 2017.

On behalf of the respondent, it was contended that they were mere distributors of the product which was sold under the brand name ‘Butterfly’. It said the product was being sold at the price fixed by the manufacturer, M/s Butterfly, Gandhimathi Appliances Ltd.

During the investigation, the Directorate General of Anti Profiteering found that Win Win Appliances had increased the base price of the product when the GST rate was reduced to 12 per cent and hence indulged in profiteering by not passing on the benefit of the tax rate cut to customers.

The National Anti Profiteering Authority (NAA), in its order, said Win Win Appliances had not passed on the benefit of reduction in GST rate to consumers and has profiteered Rs 32,926.36 between November 15, 2017 and July 31, 2018.

The NAA observed that “The Respondent had issued incorrect invoices while selling the above product to his recipients as he had incorrectly shown the base prices and had also compelled them to pay additional GST on the increased prices through the incorrect tax invoices which would have otherwise resulted in further benefit to the recipients. It is also established from the record that the Respondent has deliberately and consciously acted in contravention of the provisions of the CGST Act, 2017 by issuing incorrect invoices which is an offence under Section 122 (1) (i) of the above Act and hence he is liable for imposition of penalty under the above Section read with Rule 133 (3) (d) of the CGST Rules, 2017. In the interest of natural justice before imposition of penalty a notice be issued to him asking him to explain why penalty should not be imposed on him.”

To Read the full text of the Order CLICK HERE