The National Anti-Profiteering Authority (NAA) found the respondent, Excel Rasayan guilty of not passing GST rate cut benefits to its customers.
The applicant has alleged that the Respondent, Excel Rasayan had not passed on to his recipients the benefit of reduction in the rate of tax of GST w.e.f. November 15, 2017, from 28% to 18% in respect of his supplies of “Fortune ADW Detergent 1Kg” and “Fortune Rinse Aid 500 ml.”, as per the provisions of Section 171 (1) of the CGST Act, 2017.
The DGAP reported that the Respondent had denied the benefit of GST rate reduction to his recipients amounting to Rs.4,64,894 and had thus indulged in profiteering and violation of the provisions of Section 171 (1) of the CGST Act.
The Authority headed by the Chairman Dr. B.N. Sharma held that the Respondent has not passed on the benefit of reduction in GST rate from 28% to 18% on the above products and the respondent has violated Section 171 (1) of the CGST Act.
The NAA clarified that no penalty had been prescribed for violation of the provisions of Section 171 (1) of the above Act, therefore, the Respondent was issued show-cause notice to state why penalty should not be imposed on him for violation of the above provisions as per Section 122 (1) (1) of the above Act as he had apparently issued incorrect or false invoices while charging excess consideration and GST from the buyers.
However, from the perusal of Section 122 (1)of the CGST Act, 2017, it is clear that the violation of the provisions of Section 171 (1) is not covered under Section 122 (1) (i) of the CGST Act, 2017 as it does not provide a penalty for not passing on the benefits of tax reduction and ITC and hence the penalty prescribed under Section 122 cannot be imposed for violation of the anti-profiteering provisions made under Section 171 of the above Act.
“Since, no penalty provisions were in existence when the Respondent had violated the provisions of Section 171 (1) the penalty prescribed under Section 171 (3A) cannot be imposed on the Respondent retrospectively.,” the NAA said.
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