The National Anti-Profiteering Authority (NAA) has dismissed the profiteering allegations against the Xiaomi India.
In the complaint filed by M/s Local Circles India Pvt. Ltd. against M/s Xiaomi Technology India Pvt. Ltd., the National Anti-profiteering Authority (NAA) ordered that the supply of power-banks by Xiaomi is classified as ‘Lithium-ion Batteries’ and so 18% of Goods and Service Tax (GST) is applicable. The scope of the investigation is restricted to profiteering only and not the classification.
The M/s Xiaomi Technology India Pvt. Ltd. was engaged in selling power-bank, the Goods and Service Tax (GST) levied was at 18% before Jan 2019 and it continued to charge 18% of Goods and Service Tax (GST) even after Jan 2019 and thus it did not lead to any reduction in the rate of tax applicable to the power bank and as a consequence the price of the power bank has remained same.
The issue raised in this case was whether the Xiaomi violated any provision of Section 171 of the Central Goods and Service Tax (CGST) Act, 2017 or nor? If in case the Xiaomi has violated, then what will be the quantum of profiteering?
The NAA bench consisting of B.N. Sharma (Chairman), J.C. Chauhan and Amand Shah (Technical Member) held that power-bank did not come under the purview of the notification as it is described as the ‘Lithium-ion Batteries’ and the 18% of Goods and Service Tax (GST) levied is justified. Hence, in the present case in no aspect pertains to the case of profiteering. Therefore the scope of investigation or proceedings is limited to the issue of profiteering and not the issue of classification.
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