The applicant filed an application before the Standing Committee on Anti-profiteering, under Rule 128 (1) of the CGST Rules, 2017, alleging profiteering by the Respondent in respect of “Fly Ash Blocks” which was being supplied by the Respondent. The Applicant had alleged that the Respondent did not reduce the selling price of the above product when the GST rate was reduced from 12% to 5% vide Notification Central Tax (Rate) dated December 13, 2018, thus, the benefit of reduction in the GST rate was not passed on to the recipients by way of commensurate reduction in its price.
The DGAP submitted regarding the contention of the Respondent that the base prices were increased to offset the increase in prices of the raw materials, increase in the cost of production and blockage of accumulated ITC due to inverted duty structure, etc. that his contention could not be accepted as such increase in the prices of raw materials could not have happened overnight to exactly coincide with the GST rate reduction.
The Authority headed by Chairman B.N. Sharma and Technical Members J.C. Chauhan and Amand Shah held that the Litecon Industry to be guilty of not passing Goods and Service Tax (GST) benefits to consumers.
“Therefore, the respondent is apparently liable for imposition of penalty under the provisions of the above Section. Accordingly, a Show Cause Notice be issued to him directing him to explain why the penalty prescribed under Section 171 (3A) of the above Act read with Rule 133 (3) d) of the CGST Rules, 2017 should not be imposed on him,” the authority said.To Read the full text of the Order CLICK HERE