In its first order on anti-profiteering under goods and services tax (GST), the National Anti-Profiteering Authority (NAA) has dismissed the complaint against Vrandavaneshwaree Automotive Pvt Ltd, a Bareilly-based Honda car dealer, by concluding that it did not contravene the anti-profiteering provisions of the Central GST Act.
The order, dated March 27, states that the Honda car dealer had passed on the benefit of the reduction in tax rate after GST to the applicant by way of reduction in the price of the car by Rs 10,550.
“We find that the respondent (Honda car dealer) has given details of all the basic components of the price of the car purchased by the applicant .. .and benefit of Rs 10,550 on account of reduction of tax by about 2 per cent viz. from 31.254 per cent (pre GST) to 29 per cent (post GST) has already been passed on to the applicant and the amount of Rs 10,550 is inclusive of the ITC (input tax credit) … therefore, no additional benefit on account of ITC is required to be paid by the respondent,” the order issued by NAA’s Chairman B N Sharma and other members stated.
“The respondent (Honda car dealer) has not contravened the provisions of Section 171 of the CGST Act, 2017, and accordingly we do not find any merit in the application of Dinesh Mohan Bharadwaj filed under Rule 128 of the CGST Tax Rules, 2017 and we accordingly dismiss the same,” it added.
Section 171 of the CGST Act provides that any reduction in the rate of tax on supply of goods or services, or the benefit of input tax credit, shall be passed on to the recipient (consumer) by way of a commensurate reduction in prices.
On November 1, 2017, Bharadwaj had filed an application with the Standing Committee alleging that he was charged GST on the pre-GST determined price of Rs 9.13 lakh, while it should have been levied at the reduced price at the time of July 11 delivery of Rs 8.98 lakh. Subsequently, DG Safeguards had served notice initiation of investigation to the car dealer on December 15 last year.
Under GST, a three-tier structure is there to look into anti-profiteering complaints: state-level screening committees for complaints of local nature or a national-level standing committee for profiteering at all-India level. If the respective committees find merit in the complaints on examination, they refer the cases for further investigation to the DG Safeguards, which has to furnish a report within three months or an extended period of 6 months to the NAA. As on February 23, the DG Safeguards had issued notices of initiation of investigation in respect of 53 applications.