NAA imposes Penalty on Dealers for increasing Base Price of Dettol despite GST Rate Reduction [Read Order]

NAA GST Rate Reduction - Dettol - Taxscan

The National Anti-Profiteering Authority (NAA), while imposing a penalty on a dealer who did not pass the GST rate reduction benefit to the customers, ruled that the benefit of tax reduction should be passed on to the consumers only by the way of rate reduction.

The Applicant filed an application before the Standing Committee on Anti-profiteering stating that the respondent, the Reckitt Benckiser India Pvt.Ltd. had resorted to profiteering in respect of the supply of “Dettol HW Liquid Original 900 ml” and had also alleged that the respondent had not passed on the benefit of rate reduction in the Goods and Service Tax (GST) rate from 28% to 18% and instead, increased the base price of the product.

The Respondent contended that there was no stipulation in Section 171 which required that the benefit of rate reduction should be passed on to the customers by ‘commensurate reduction’ only in cash and methods like increase in the quantity of goods supplied and promotional offer of giving an item free along with main product etc. were not to be followed.

The National Anti-Profiteering Authority (NAA) observed that the benefit of tax reduction should be passed on to the consumers only by the way of GST rate reduction.

“As per Rule 136 of the Central Goods and Service Tax Rules, 2017 directs the Commissioners of the CGST/SGST to monitor this order under the supervision of the DGAP by ensuring that the amount profiteered by the Respondents as ordered by this Authority deposited in the CWFs of the Central and the State Governments as per the details given above in Para-58. A report in compliance with this order shall be submitted to this Authority by the concerned Commissioner within a period of 4 months from the date of receipt of this order,” NAA said.

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