Respondent HUL having denied benefit of tax reduction to his customers and appropriated tax benefits himself by increasing base price of products was to be held guilty of profiteering

CGST : Respondent HUL having denied benefit of tax reduction to his customers and appropriated tax benefits himself by increasing base price of products was to be held guilty of profiteering

• HUL, by issuing letter to re-distribution stockists (RS) mentioning that benefit of rate reductions shall be passed on to consumers through MRP reductions/increased fill levels, had not only denied ITC to RSs but also restrained

them from passing benefit of tax reduction rates to its customers, making them equally liable for contravention of section 171. HUL deposited excess realization in Consumer Welfare Fund (CWF) only after complaint of profiteering was lodged against him and not deposited amount of profiteering by claiming number of deductions.

• Thus, it was to be held that HUL having deliberately increased base prices by enhancing them equivalent to amount of GST rate reductions and kept same MRPs or not reduced same proportionate to tax reduction benefits had committed an offence under section 122 (1)(i) of CGST Act, 2017 by issuing incorrect invoices to his customers and thus penal provisions were required to be invoked against him.

[2018] 100 taxmann.com 488 (NAA)

NATIONAL ANTI-PROFITEERING AUTHORITY

Ankit Kumar Bajoria

v.

Hindustan Unilever Ltd.