Raymond not Passed the Benefit of Tax Reduction to Customers: NAA [Read Order]

The National Anti-Profiteering Authority (NAA) has observed that M/s Raymond has not passed on the benefit of tax reduction and has violated the provisions of Section 171(1) of the Central Goods and Service Tax (CGST), Act, 2017.

M/s Raymond Ltd. had not passed on the benefit of tax reduction from 28% to 18% on ‘After‑Shave Lotion Park Avenue Good Morning 50 ml” which was supplied to M/s Big Bazaar, Inderlok under Purchase Order with MRP of Rs. 115/- under Purchase Order with the same MRP of Rs. 115/- and under Purchase Order again with the same MRP of Rs. 115/-.

The Standing Committee initiated the proceedings keeping in view the fact that after detailed investigation it has been apparently found by the DGAP that both the Respondents have not passed on the benefit of rate reduction and have violated the provisions of Section 171 (1) of the Central Goods and Service Tax (CGST), Act, 2017.

The authority headed by the Chairman Dr. B.N. Sharma and technical members J.C. Chauhan and Amand Shah upheld that the investigation conducted by the DGAP within the ambit of Rule 129 of the Rules and noted that it is established that both the Respondents have acted in contravention of the provisions of Section 171 of the CGST Act, 2017 and have not passed on the benefit of reduction in the rate of tax to their recipients by a commensurate reduction in the price.

The Authority directed the Respondent to reduce the prices of the impacted products as per the provisions of Rule 133 (3) a) of the CGST Rules, 2017, keeping in view the reduction in the rate of tax so that the benefit of tax reduction is passed on to the recipients. The Respondents are also directed to deposit the profiteered amounts along with the interest to be calculated @ 18% from the date when the above amounts were collected by them from the recipients to the above amounts are deposited, in terms of Rule 133 (3) (b) of the CGST Rules, 2017. Since the recipients, in this case, are not identifiable, the above Respondents are directed to deposit the above amounts of profiteering along with interest in the SWFs of the Central and the concerned State Governments as per the provisions of Rule 133 (3) (c) of the CGST Rules, 2017 in the ratio of 50:50 along with interest @ 18% till the same is deposited.