2018-TIOL-GST-234 Dated: Saturday, December 01, 2018

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GST - November revenue dips to Rs 97637 crores

GST NAA CASE

2018-TIOL-14-NAA-GST

Crown Express Dental Lab Vs Theco India Pvt Ltd

GST - Anti-Profiteering - Section 171 of the CGST Act, 2017 - Applicant has purchased machinery from respondent which were imported from Germany - Applicant states that though the respondent had quoted price of Rs.59.06 lakhs with additional 2% CST and 2% freight as per his quotation dated 28.11.2016, he was asked to pay an amount of Rs.71,08,462/- vide tax invoice dated 06.09.2017 which included IGST @18% of Rs.10,84,342/- - Applicant alleges that after implementation of GST, a number of taxes viz. CST, Countervailing duty (CVD) and Special Additional Duty (SAD) had been subsumed in IGST but the respondent had charged 18% IGST on Rs.59,06,000/- which was the selling price as per the quotation dated 28.11.2016 and which included CVD and SAD etc, which had been merged in IGST and hence he had been denied the benefit of Input Tax Credit (ITC) by Respondent - Respondent intimated that he had imported and sold both the items after GST was implemented and he had not claimed any transitional benefit on them - DGAP has, after investigation, stated that had the import of the items had been made prior to implementation of GST when the respondent was required to pay CVD @12.% and Special Additional Duty (SAD) @4%, he would have got refund of the SAD upon the sale of these items but he could not have claimed credit of CVD which would have formed part of the cost of the imported items - inasmuch as based on the quotation the applicant would have been required to pay Rs.60,24,120/-, however, the imports were made after coming into force of GST when CVD and SAD were subsumed in the IGST and hence the entire amount of IGST @18% paid at the time of import was available as ITC to the respondent and, therefore, the respondent ought to have reduced the base price to the extent of CVD that was no longer to be paid as well as to the extent the IGST credit was available to him - DGAP has concluded that the invoice on which IGST @18% was charged proved that the base price of the above items had remained the same i.e Rs.60,24,120/- as per the quotation dated 28.11.2016 and the base price was not reduced to the extent of CVD that was not to be paid after implementation of GST - inasmuch as the total price to be charged to the appellant should have been Rs.66,30,377/- instead of Rs.71,08,462/- and hence the total amount of profiteering done by the respondent in the case of supplies made to the applicant was Rs.4,78,085/-.

Held: There is no merit in the arguments made by the respondent that the applicant had agreed that the machine may be supplied on the increased price since there is no evidence on record to prove the claim - so also, since the items were supplied when GST had come into force, there is no question of payment of CST by respondent - Respondent should have reduced the base price to the extent of CVD (@12.5%) since in the period post GST no CVD was charged and instead IGST was charged on the import of goods and which was available as ITC to respondent while supplying goods to the applicant - price offered prior to implementation of GST has to be reduced by the amount of CVD paid in order to neutralise the impact of ITC now available to the respondent - Respondent ought to have reduced the base price to the extent of CVD that was no longer required to be paid as well as to the extent of IGST whose credit was now available to him - respondent has admitted that he had not deposited the amount of CVD collected by him from the applicant on both the items to the Government account and, therefore, he was bound to reduce the price by the amount of CVD - Respondent has profiteered by the amount of Rs.4,78,085/- as computed by DGAP and, therefore, they have violated the provisions of section 171 of the CGST Act, 2017 and have rendered themselves liable to penal action in line with section 122 of the CGST Act, 2017 apart from his liability to refund the above profiteered amount along with applicable interest - in the interest of justice to the customers, a fresh investigation by the DGAP covering all products supplied by respondent within the confines of Section 171 of the CGST Act, 2017 is merited to unearth and quantify the benefit that the respondent has failed to pass on to his customers - DGAP directed accordingly - Application succeeds: National Anti-Profiteering Authority.

- Application allowed: NAA

GST AAR CASES

2018-TIOL-289-AAR-GST

Uttara Impex Pvt Ltd

GST - From the description of animal feeds, only those products that merit classification as corresponding to HSN Code mentioned in entry no. 102 of the exemption notification are entitled for exemption - Products requested for classification are squarely covered by Chapter 28 and 29 of the Customs Tariff Act - In view thereof, DL Methionine, Sodium Bicarbonate, Betaine HCL, Tryptophan, Threonine, Lysine HCL, Sodium Sulphate, Lysine Sulphate and Monocalcium Phosphate are covered under Schedule III and they would be liable to taxes @18% IGST - However, Di Calcium phosphate [2835 2610] of animal feed grade conforming to IS Specification no. 5470:2002 would fall under Sr. no. 105 of exemption Notification 2/2017-ITR: AAR