Fact: M/S S.J. Spices Ltd (“the respondent”) was alleged on the supply of “Black Pepper” under HSN code: 09041140, 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/106/2018/1721-25 dated January 31, 2019 which states that invoice issued by M/s S.J. Spices on June 21, 2017 and while post-GST invoice was issued by M/s Kerala Spices. Thus, a comparison of the two invoices is not possible. Further, it is also stated that in the pre-GST era, the product “Black Pepper” attracted VAT@ 5% and there was no Central Excise Duty as per Central Excise Tariff Act, 1985. After implementation of the GST w.e.f. 01.07.2017, the tax rate of the 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 89 (NAA)