Anti-profiteering provisions shall not apply if base price of product reduces after reduction in GST rate

CGST : Where applicant alleged profiteering by respondent on supply of Peps Spring Koil Bornell Normal Maroon 75x60x6" Mattress (HSN Code 94042910), by not passing on benefit of reduction in rate of tax of GST from 28 per cent

to 18 per cent, since base price of product (excluding GST) had also reduced which was more than commensurate rate reduction, respondent had not contravened provisions of section 171 of the CGST Act, 2017

• The applicant had referred the instant case to the Standing Committee on Anti-profiteering, alleging profiteering by the respondent on the supply of Peps Spring Koil Bornell Normal Maroon 75x60x6" Mattress (HSN Code 94042910), by not passing on the benefit of reduction in the rate of tax of GST from 28 per cent to 18 per cent, w.e.f.. 15-11-2017 vide Notification No. 41/2017-Central Tax (Rate), dated 14-11-2017.

• Admittedly, there was a decrease in the rate of tax on the said product from 28 per cent to 18 per cent w.e.f. 15-11-2017 but it was also established that the base price (excluding GST) of the product in question had also reduced from Rs. 7986 to Rs. 7,034 after offering a discount of Rs. 1,006 which is more than commensurate rate reduction. As the Net Base Price (excluding tax) of the above product has been reduced by the respondent, the allegation of profiteering is not sustainable.

• Thus, the respondent has not contravened the provisions of section 171 of the CGST Act, 2017 and therefore, impugned application was to be dismissed.

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[2019] 103 taxmann.com 453 (NAA)

NATIONAL ANTI-PROFITEERING AUTHORITY

kerala Level State Screening Committee on Anti-Profiteering

v.

Peps Industries (P.) Ltd.

B.N. SHARMA, CHAIRMAN 
AND J.C. CHAUHAN, MS. R. BHAGYADEVI AND AMAND SHAH, TECHNICAL MEMBER

CASE NO. 22 OF 2019

MARCH  28, 2019 

SMT. A. Shainamol for the Applicant..

ORDER