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Vijeetha Supermarket found guilty of Profiteering: NAA imposes Penalty and 18% interest to be deposited in Consumer Welfare Fund

Supermarket - NAA - Taxscan

The National Anti Profiteering Authority (NAA) has found Vijetha Supermarket found guilty of profiteering as when the rates of GST was reduced from 5% to NIL, the respondent did not reduce the selling price of ‘frozen green peas’. Consequently, the Authority imposed the penalty and 18% interest to be deposited in the Consumer Welfare Fund.

The Applicant filed an application alleging profiteering by the Respondent, Vijetha Supermarket in respect of the product ‘Frozen Green Peas’ supplied by him. The Applicant had alleged that the Respondent had not reduced the selling price of the ‘Frozen Green Peas’ when the GST rate was reduced from 5 % to Nil with denial of Input Tax Credit.

The DGAP has computed the profiteered amount by comparing the average base prices of both the above products in respect of which the rate of GST was reduced from 5% to 0% with the actual post rate reduction base prices of these products. From the invoice and the details of the outward supplies made available by the Respondent. It has been found that he has increased the base prices of his products when the rate of GST was reduced from 5% to 0%, therefore, the commensurate benefit of GST rate reduction was not passed on to the recipients. There was no reason for the Respondent to increase his base prices exactly equal to the rate of tax reduction. Such a coincidence is incomprehensible, strange, and unheard of which shows that the Respondent has deliberately tried to pocket the benefit of tax reduction to enrich himself at the expense of the vulnerable customers.

The Authority headed by the Chairman, B.N. Sharma, and Members J.C. Chauhan and Amand Shah has ruled that Vijetha Supermarket found guilty of profiteering as when the rates of GST was reduced from 5% to NIL, the respondent did not reduce the selling price of ‘frozen green peas’. Consequently, the Authority imposed the penalty and 18% interest to be deposited in the Consumer Welfare Fund.

To Read the full text of the Order CLICK HERE
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