NAA penalizes VTWO Ventures for Profiteering, Issuing Incorrect Invoices [Read Order]

The National Anti Profiteering Authority ( NAA ) vide its order dated 10.05.2019 in its case of Kerala State Screening Committee on Anti Profiteering v. M/s VTWO Ventures held M/s VTWO Ventures guilty of anti-profiteering and is directed to deposit the profiteered amount along with interest along with a penalty under Section 122 for deliberately acting in contravention of the provisions of CGST Act, 2017.

The Kerala State Screening Committee on Anti Profiteering referred the instant matter to the Standing Committee on Anti Profiteering, alleging profiteering by the respondent on supply of “luggage trolley bag/suitcases”, namely “Tropic 45 Weekender Black” and “Neolite Strolly 53 360(VIP) FIR”, as the benefit of reduction in the rate of tax of GST w.e.f. 15.11.2017 had not been passed on by the Respondent to the recipients.

It was submitted by the respondent that he had not increased the prices of his products post implementation of GST, since he was hopeful of a reduction in the tax rate and that the reduction in GST rate from 28% to 18%, which came into effect from 15.11.2017, had only corrected the excessive tax burden which was being borne by him

Further, the DGAP reported that the investigation revealed that the Respondent had actually increased the base price of the products when GST rate on the said products was reduced which implied that the commensurate benefit of rate reduction was not passed on to the recipients by the Respondent.

The bench constituting of Sh. B.N. Sharma, Sh. J.C. Chauhan, Ms. R. Bhagyadevi and Sh. Amand Shah held that the methodology and the profiteered amount calculated by the DGAP is correct and hence a direction to reduce the prices of the products with a reduction in the tax rate is given with a view to pass on the benefit to the recipients. The recipient is further directed to deposit the profiteered amount along with interest from the date when the amount was collected by him from the recipients till the above amount is deposited within a period of 3 months from the date of receipt of order.

The respondent is further penalized under Section 122(1)(i) for deliberately and consciously acting in contravention of the provisions of the CGST Act, 2017 by issuing incorrect tax invoices.

To Read the full text of the Order CLICK HERE