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NAA imposes Penalty for Profiteering Amount and directed it to be deposited in Consumer Welfare Funds [Read Order]

NAA - deposit Profiteered Amount - Consumer Welfare Fund - Taxscan

The National Anti-Profiteering Authority (NAA) held that the respondent has denied the benefit of tax reduction to the customers in contravention of the provisions of Section 171(1) of the CGST Act, 2017.

As per Rule 136 of the CGST Rules 2017 directs the Commissioners of CGST/SGST to monitor this order under the supervision of the DGAP by ensuring that the amount profiteered by the Respondent as ordered by this Authority is deposited in the Consumer Welfare Funds (CWFs) of the Central and the State Governments.

The Authority held that the respondent is apparently liable to be penalized as per Section 171(3A) of the CGST Act, 2017. Therefore, a show-cause notice be issued directing him to explain why the penalty prescribed should not be imposed on him.

The Standing Committee on Anti-profiteering requested the DGAP to conduct a detailed investigation as per Rule 129 (1) of the Rules on the allegation that M/s Vini Cosmetics Pvt. Ltd. had not passed on the benefit of tax reduction from 28% to 18% w.e.f. 15.11.2017 on “Fogg Deo Fougere BX 150 ml” which was supplied to M/s Big Bazaar. Inderlok on 09.11.2017 under Purchase Order.

The DGAP has reported that the main issues for determination were whether the rate of GST on the product “Fogg Deo Fougere BX 150ml supplied by M/s Vini Cosmetics Pvt. Ltd. and the Respondent was reduced wef. 15.11.2017 and if so, whether M/s Vini Cosmetics Pvt. Ltd. and the Respondent had passed on the benefit of such reduction. In GST rate to their recipients, in terms of Section 171 of the Central Goods and Services Tax Act, 2017. The DGAP has also observed that the Central Government, on the recommendation of the GST Council, had reduced the GST rate on the product “Fogg Deo Fougere BX 150ml” from 289 to 18% wef. 15.11.2017. vide Notification No, 41/2017 – Central Tax (Rate) dated 14112017 was a matter of fact which had not been contested by Mis Vini Cosmetics Pvt Ltd and the Respondent.

The authority consisting of Technical Member J.C. Chauhan and Amand Shah held that the respondent has denied the benefit of tax reduction to the customers in contravention of the provisions of Section 171(1) of the CGST Act, 2017. As per Rule 136 of the CGST Rules 2017 directs the Commissioners of CGST/SGST to monitor this order under the supervision of the DGAP by ensuring that the amount profiteered by the Respondent as ordered by this Authority is deposited in the Consumer Welfare Funds (CWFs) of the Central and the State Governments.

The authority further held that the respondent is apparently liable to be penalized as per Section 171(3A) of the CGST Act, 2017. Therefore, a show-cause notice is issued directing him to explain why the penalty prescribed should not be imposed on him.

To Read the full text of the Order CLICK HERE
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