National Anti-Profiteering Authority (NAA): The Quorum of B.N. Sharma, Chairman and J.C. Chauhan, R. Bhagyadevi and Amand Shah, Technical Members, dealt with an application alleging profiteering on the supply of “Paint” by not passing on the benefit of reduction in the rate of tax of GST.

For the above-stated issue, the application was examined by the Standing Committee on Anti-Profiteering and was further referred to Director General of Anti-Profiteering (DGAP).

DGAP in its report on investigating the issue in a detailed manner stated in its report that vide Notification No. 41/2017-Central Tax (Rate) dated 14.11.2017, the rate of GST was reduced from 28% to 18% on the said product. Respondent had reduced the selling price (including GST) of the above product from Rs 175.40 to Rs 161.70 by maintaining the base price of Rs 137.03 (after discount) and charging GST at a lower rate of 185 on the said price.

DGAP on the analysis of the scenario stated that, there was no contravention of Section 171 of the CGST Act, 2017 relating to profiteering.

On careful consideration of the DGAP’s report and the documents placed on record, the Authority stated that it is evident that the respondent had maintained the same base price post reduction in the rate of tax resulting in the cum-tax price from Rs 175.40 to Rs 161.70. Since the benefit of reduction has been passed on by the respondent by a commensurate reduction in his price, he cannot be held guilty under Section 171 of the CGST Act. [Kerala State Screening Committee on Anti Profiteering v. Asian Paints Ltd., 2019 SCC OnLine NAA 15, Order dated 13-03-2019]

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