The National Anti-Profiteering Authority (NAA) imposed the penalty on Whirlpool for denying the benefit of a rate reduction of Goods and Service Tax (GST) to consumers.
The Applicant referred a case to the Standing Committee on Anti-profiteering against the Respondent, Whirlpool alleging profiteering on the supply of ‘Refrigerator Whirlpool FP313D Protton Roy Mirror’ (HSN code 84182100) by not passing on the benefit of reduction in the rate of tax w.e f. July 1, 2017, by way of commensurate reduction in price, in terms of Section 171 of the Central Goods and Services Tax (CGST) Act, 2017.
On examining the documents submitted by the Respondent, the DGAP observed that the impugned product was manufactured at Pune (Maharashtra) only while it was sold in Maharashtra and in other States. So, it is liable to Central Sales Tax 2% apart from the VAT (ranging between 12.50 percent to 15.95 percent) and the Central Excise Duty 12.50 percent on the abated MRP. In some States, Entry Tax (1 percent to 2 percent) was also levied on the impugned product.
Hence, the DGAP said that the average tax incidence in the pre-GST period was about 31.5 percent which had got reduced to 28 percent on the introduction of GST. Therefore, the DGAP has claimed that the contention of the Respondent that the total tax incidence on the impugned product has increased in the post-GST period was not correct.
The authority consisting of a Technical Member J.C. Chauhan and Amand Shah directed the respondent to reduce the price of the product as per the provisions of Rule 133 (3) (a) of the CGST Rules, 2017, keeping in view the reduction in the rate of tax so that the benefit of tax reduction is passed on to the recipients.
GST Anti-Profiteering watchdog further directed the Respondent, Whirlpool to deposit the profiteered amount of INR 4,07,451/- along with the interest to be calculated 18 percent from the date which the amount was collected by him from the recipients till the amount is deposited, in terms of Rule 133 (3) (b) of the CGST Rules, 2017 within three months.-Tax Scan