The District Consumer Disputes Redressal Forum directed a leading footwear brand to pay a compensation of Rs 5,000, including cost of litigation Rs 2,500 for charging VAT on retail price to a resident of Mohali.
The forum has asked Aero Club (Woodland India) and College Shoes (Woodland Store), Sector 17 to refund Rs.377.55 excess amount charged as 5 per cent VAT to the Amandeep Singh.
The complainant, Amandeep, said to promote the sale of its products, the store offered a discount of 40 per cent on the MRP and he purchased a jacket, pullover and sweatshirt for Rs 2,895, Rs 2,695 and Rs 6,995, respectively, making a bill amount of Rs 12,585 on February 5 this year.
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However, he was shocked to see the invoice issued by College Shoes when he noticed an amount of Rs 377.55 was charged towards VAT on the discounted price of Rs 7551. It has been averred that the cost of the items was already inclusive of all taxes. He then objected to the imposition of VAT at the cost of the items but the shop owners didn’t pay heed to it. He then filed a case in the consumer courts on April 7, this year.
In its reply, the company said, it was pleaded on the display board and advertisement pertaining to the sale that 40 per cent to 50 per cent discount are only for the purpose of allowing the reduction but it is subject to payment of VAT and the complainant after understanding the scheme opted to buy the goods.
The forum observed, “There is a difference between the remarks “Retail Price” and “Actual Price” of the goods. The MRP is inclusive of all taxes and a retailer can sell at a price below the MRP (Maximum Retail Price) because MRP is the maximum retail price allowed for that commodity and not the actual price. A retailer can well reduce his margin built into MRP.