National Anti-profiteering Authority finds no violation of Section 171 of CGST Act by producer-exporter of “India Gate Basmati Rice”; Dismisses application which alleged that the producer had indulged in profiteering by not passing on the benefit of reduction in tax rate on “India Gate Basmati Rice” to consumers and had in fact, increased the MRP; NAA notes that such basmati rice was not liable to tax before implementation of GST and it is only w.e.f. September 2017 that 5% GST was levied thereon with availability of ITC, hence “the rate of tax has been increased from 0% to 5% instead of reduction in the same..”;
However, ITC claimed by the producer was not sufficient to meet its output tax liability and had to pay balance amount of tax in cash, observes NAA on perusing the GSTR-3B returns for the months of September to November 2017 which showed ITC as a percentage of total value of supplies to range from 2.69% to 3% vis-à-vis output tax liability of 5%; NAA also notes that purchase price of paddy had increased in 2017 as compared to 2016, which constitutes major part of cost of Basmati Rice, thereby resulting in an increase of 8% in MRP;
Accordingly, NAA holds, “…due to the imposition of the GST…as well as the increase in the purchase price of the paddy there does not appear to be denial of benefit of ITC as has been alleged by the Applicant as there has been no net benefit of ITC available to the Respondent which could be passed on to the consumers…”; Resultantly, finds no substance in the application filed and dismisses the same : National Anti-Profiteering Authority
Citation: [TS-173-NAA-2018-NT]