Anti-profiteering provisions not attracted on supply of ‘Jockey Shorts’, as no reduction in tax rate: NAA

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Fact: M/S. Sudarsans (“the respondent”) was alleged on the supply of “Shorts” (Jockey Shorts US 56 M ASSTD) under HSN Code: 62034200, by Kerala State Screening Committee on Anti-profiteering for not passing on the benefits of reduction in the tax at the time of implementation of GST w.e.f. July 01, 2017. Thus, it was alleged that the respondent had indulged in profiteering in contravention of the provisions of Section 171 of CGST Act, 2017.

Held: The Directorate General of Anti-Profiteering (“DGAP”) vide Final Order No. 22011/NAA/108/2018/1737-40 dated February 04, 2019 which states that Shorts (HSN Code 62034200), was exempted from Central Excise duty, vide Notification No. 30/2004-CE dated July 09, 2004 and attracted only VAT @5%. After implementation of the GST w.e.f. July 01, 2017, the tax rate of product was fixed 5%. The rate of tax on the product remained same in pre and post-GST era. Therefore, it can be concluded that there was no reduction in the rate of tax on the product and hence there is no contravention of the anti-profiteering provisions contained in Section 171(1) of the CGST Act, 2017.

Citation: [2019] 102 taxmann.com 88 (NAA)

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