NAA finds Supplier of ‘ECLAT SERUM’ Guilty of Anti-Profiteering [Read Order]

NAA - ECLAT SERUM - Guilty - Anti-Profiteering - CGST Act - Taxscan

The National Anti-Profiteering Authority (NAA), has held that M/s S. R. Life Sciences is guilty of anti-profiteering u/s 171 of Central Goods and Services Tax Act, 2017 on supply of ‘ECLAT SERUM’.

An application was filed against the respondentM/s S. R. Lifesciences alleging that the respondent had not reduced the selling price of the ‘ECLAT SERUM’, when the GST rate was reduced from 28% to 18% and the price of the product was increased by the respondent and thus the benefit of reduction in GST rate was not passed on to the recipients by way of commensurate reduction in price, in terms of section 171 of CGST Act, 2017.

The DGAP concluded that the benefit of a reduction in the GST rate was not passed on to the recipients by way of a commensurate reduction in price. Thus, the allegation of profiteering by way of increasing the base price of the product was sustainable against the respondent.

The Coram of Mr. Amand Shah, Chairman, Mr. Pramod Kumar Singh, Technical Member, and Mr. Hitesh Shah Technical Member has observed that there has been a reduction in the rate of tax from 28% to 18% on the “ECLAT SERUM” being supplied by the respondent. Therefore, the respondent is liable to pass on the benefit of tax reduction to his customers in terms of section 171 (1) of the CGST Act, 2017. But no such benefit is transferred to the recipients.

The Authority has held that “the respondent has acted in contravention of the provisions of section 171 CGST Act, 2017 and has not passed the benefit of reduction in the rate of tax to his recipients by a commensurate reduction in the prices. Accordingly, the profiteered amount is determined as Rs. 1,54,138/- as per the provisions of Rule 133 (1) of the CGST Rules, 2017”.

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Notification No:2201/NAA/148/SRL/2020

Date of Judgement:   10/05/2022

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