The GST anti-profiteering authority has found Philips India guilty of not passing on GST rate cut benefit of more than Rs 4.53 lakh to consumers. The National Anti-Profiteering Authority (NAA) had ordered Directorate General of Anti Profiteering (DGAP) to conduct investigation into the complaint against the MNC firm for not reducing the price of its ”Food Processor” after implementation of the GST from July 1, 2017.
The DGAP found that the tax rate on the food processor was reduced to 28 percent after implementation of Goods and Services Tax from 29.80 percent pre-GST. The DGAP found that the food processor was being imported from abroad and hence Philips was paying 12.50 percent countervailing duty on the MRP apart from Value Added Tax (ranging between 12.50-15.95 percent.
Therefore, the average tax incidence was 29.80 percent in the pre-GST era. “It is observed that DGAP has computed the amount of profiteering (between July 1, 2017 to December 31, 2018) based on documents/data provided by the Respondent (Philips India) himself. Therefore, we hold that the Respondent has profiteered by an amount of Rs 4,53,949,” the NAA said in its order.
The authority directed Philips to deposit the profiteered amount, along with 18 percent interest, to the Consumer Welfare Fund within three months. The NAA in its order said that Philips India has been engaged in supply of several other products, prices of which has been impacted at the time of introduction of GST.
“Since the DGAP has established that the Respondent has contravened the provisions of Section 171 of the CGST Act 2017, while selling the product ”Food Processor”, it becomes inevitable to investigate the profiteering aspect in respect of other impacted products too which have been supplied by the Respondent,” it said. The NAA directed DGAP to investigate into all the other impacted products which have been supplied by the Respondent and submit a detailed report.