NAA | No profiteering where there is neither any reduction in rate of tax nor increase in per unit base price of the product

National Anti-Profiteering Authority (NAA): The Coram of B.N. Sharma (Chairman), and J.C. Chauhan and R. Bhagyadevi (Technical Members) dismissed an application filed by Kerala State Screening Committee for being devoid of merit.

Respondent’s case was referred to the Standing committee on Anti-Profiteering (Standing Committee) by Kerala State Screening Committee alleging profiteering on the supply of trousers. It was alleged that respondent had indulged in profiteering in contravention of Section 171 of Central Goods and Services Tax Act, 2017 (CGST) by not passing on benefits of reduction in tax post implementation of the Goods and Services Tax. In this regard, the applicant placed reliance on two invoices issued by the respondent – invoice dated 29-04-2017 (pre-GST) and invoice dated 12-09-2017 (post-GST).

The Standing Committee, after examining the case, referred it to Directorate General of Anti-Profiteering (DGAP) for detailed investigations under Rule 129 (1) of CGST Rules, 2017. DGAP’s report stated that being exempt from central excise duty, ‘trousers’ only attracted fixed GST of 5 percent. Further, the rate of tax and base price of the product had remained the same in the pre-GST and post-GST period.

The Authority held that, on the basis of evidence on record, there was neither reduction in the rate of tax nor increase in per unit base price of the product. Hence, anti-profiteering provisions of Section 171 of the CGST Act were not attracted. In view thereof, the application was dismissed.[Kerala State Screening Committee v. Emke Silks & Garments (P) Ltd., 2019 SCC OnLine NAA 7, Order dated 11-02-2019]

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