NAA finds Sharma Industries guilty of denying GST rate cut benefit to the customers [Read Order]

The National Anti-Profiteering Authority (NAA) found the Sharma Industries guilty of denying GST rate cut benefit to the customers.

The Applicant complained that the Respondent, M/s Sharma Industries had not passed on the benefit of reduction in the rate of tax to the above Applicant by way of commensurate reduction in the price of the product ‘Vaseline VTM 400 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 a reduction in the rate of tax to the above Applicant and other customers amounting to Rs. 5,50,370, pertaining to the period w.e.f. November 15, 2017, to January 31, 2018, and had thus indulged in profiteering and violation of the provisions of Section 171(1) CGST Act, 2017.

The Authority headed by the Chairman Dr. B.N. Sharma noted that the Respondent was issuing incorrect invoices in which the base price was deliberately enhanced exactly equal to the amount of reduced tax and thus he had denied the benefit of reduction in the rate of tax granted to his customers and accordingly he had committed an offense under Section 122(1)() of the CGST Act, 2017 and hence, he was liable for imposition of penalty under the provisions of the above Section 4.

However, the Authority did not impose any penalty on the grounds that no penalty provisions were in existence in the period 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.