NAA dismisses Complaint since GST Reduction was not granted to Product which Respondent alleges Profiteering [Read Order]

The National Anti-profiteering Authority ( NAA ) has dismissed a complaint as it was found that the rate reduction was not granted to the product in question as alleged by the complainant.

The applicant alleged that the respondent had maintained the same selling price of Rs.6,869/- for the product “HP V202b 19.5 inch Computer Monitor” when the GST rate was reduced from 28% to 18% w.e.f 01.01.2019 and thus had profiteered by not passing on the benefit of reduction of GST by way of commensurate reduction in price.

The DGAP has contended that the allegation itself was completely misplaced as there was no reduction in the rate of tax.

After verifying the records, the NAA found that the Central Government, on the recommendation of the GST Council, had levied 28% GST on “Computer Monitors exceeding 17 inches” (S. No. 154 of Schedule-IV and SI. No. 384 of Schedule-III), vide Notification 01/2017-Central Tax (Rate) dated 28.06.2017. The GST rate on “Computer Monitors exceeding 17 inches but not exceeding 20 inches” (SI. No. 154 of Schedule-IV and SI. No. 384 of Schedule-Ill) was reduced from 28% to 18%, vide Notification No. 27/2017-Central Tax (Rate) dated 22.07.2017. Further the Central Government, on the recommendation of the GST council had reduced the GST rate on “Computer Monitors of size ranging between 20 inches to 32 inches” from 28% to 18%, vide Notification No. 24/2018 Central Tax (Rate) dated 31.12.2018, w.e.f. 01.01.2019.

“The allegation of the Applicant No. 1 was that the Respondent had not passed on the benefit of rate reduction for the product “Computer Monitor of 19.5 inch” w.e.f, 01.01.2019. We find that there was no rate reduction in tax on the product “Computer Monitor of 19.5 inch” as has been alleged by the Applicant. We also find that the rate reduction from 28% to 18% vide Notification No. 24/2018 w.e.f. 01.01.2019 was only effective in the case of “Computer Monitors of size ranging between 20 inches to 32 inches” which is entirely different from the product in respect of which the above Applicant has alleged profiteering. The provisions of Section 171 of the CGST Act, 2017 can be invoked only in cases where there was a reduction in the rate of tax or where the additional benefit of ITC was made available to the Respondent, that needed to be passed on to the recipients. Apparently in this case, the only allegation is that the benefit of rate reduction has not been passed on to the above Applicant by the Respondent. However as per the facts mentioned above the allegation made by the Applicant is not correct since there was no Case No. :46 /2019.”