The National Anti-profiteering Authority (NAA), New Delhi has directed Patanjali Ayurveda to deposit 75 Crore Rupees the profiteered amount by the company with 18 percentage in specified Consumer Welfare Fund(CWF).
The DGAP in his report had stated that the Respondent did not pass on the benefit of the reduction in the tax rates to his recipients by way of commensurate reduction in prices, in terms of Section 171 of the CGST Act, 2017. In the said report, the DGAP reported that the Respondent had contravened the provisions of Section 171(1) of the CGST Act, 2017
The Coram constituting Chairman, N. Sharma and two Technical Members, J. C. Chauhan, and Amand Shah pronounced the order based on an application filed against M/S Patanjali Ayurveda Ltd.
The Company allegedly profiteered the said amount by not passing on to consumers the benefit of deduction in Goods and Service Tax rates announced in November 2017. The amount should be deposited within three months in specified consumer welfare funds of central and state governments along with an 18% interest from the date amount was collected.
Coram said that it was evident from an assessment that the company has denied the benefit of tax reduction to consumers in contravention of the provision of section 171(1) of the CGST Act and has profiteered as per the elaboration of this section.
Section 171 of the CGST Act, 2017, provides that any reduction in the rate of tax on any supply of goods or services or the benefit of the input tax credit shall be passed on to the recipient by way of commensurate reduction in prices.
The Coram further said that CGST Act mandates that companies should make an immediate reduction in price to the consumer when a tax relief in terms of rate deduction or input tax credit is given and there is no lock-in period for holding this reduced period.
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