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NAA finds company guilty for not reducing base price post reduction in GST rate

  • Jun 4, 2020 | Divita S Gupta

The National Anti Profiteering Authority in India penalised a company on charges of profiteering. It held that customers are entitled to benefit from tax rate reduction by way of reduced prices and the fact that the company did not reduce the MRP of their products even after the reduction in GST rate is a violation under GST laws. The applicant had purchased an imported second hand ‘Heidelberg Offset Press SM 74-5 +LX’ including tools and accessories from the respondent for which the latter quoted a price of ₹1 crore 40 lakh as per the proforma invoice. The applicant was, however, billed for an amount of ₹ 1 crore 65 lakh and 20 thousand at a GST rate of 18%. The applicant also claimed that various existing taxes like VAT, CST, CVD, etc. would ideally be subsumed under GST but the respondent charged 18% GST on the buying price inclusive of erstwhile taxes like CVD and SPL CVD etc. and did not pass on the benefit of ITC to him by way of commensurate reduction in price in terms of Section 171 of the CGST Act, 2017. The NAA held that the respondent is liable for imposition of penalty under the provisions of Section 171 of Central Goods and Service Tax (CGST), 2017.


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Avalara Author
Divita S Gupta
Avalara Author Divita S Gupta
Divita has served as a writer and editor for top financial services organizations in India. She has written on topics like mutual funds, insurance, taxes, SME financing for globally recognized banking and financial organizations including ICICI, Aditya Birla Group, News Corp. With a Masters in Business Administration from Symbiosis International University, she currently owns a small business in Mumbai.