No Anti-profiteering if the base price of the product remain same even after reduction in GST rate

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Facts: M/s. Somany Ceramics Ltd. (“The Respondent”) was alleged profiteering on the supply of “Ceramics Glazed Wall Tiles, Printex Crema, PRM 300×600 MM under HSN Code 69072300′(“The Product”) by not passing on the benefit of reduction in the rate of tax w.e.f. November 15, 2017, granted vide Notification No. 41/2017 Central Tax (Rate) dated November 14, 2017 by the Central as well as the State Governments. The application was examined by Standing Committee on Anti-Profiteering which was further investigated by Director General of Anti-Profiteering (“DGAP”) on the basis of two invoices of the dealer which was submitted for reference.

Held: The Hon’ble National Anti-Profiteering Authority (“NAA”) vide its Case No. 19 of 2019 dated March 13, 2019 that the respondent did not increase the per unit taxable amount (excluding GST) of the product after GST rate reduction from 28% to 18% w.e.f. November 15, 2017 which was Rs. 374.74/- for both the periods. The respondent has further intimated that the issue of benefit of ITC was not the subject matter of this inquiry as no such benefit had accrued. Therefore, it can be concluded that there was no reduction in the base price of 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] 103 taxmann.com 183 (NAA)