2022-TIOL-1295-HC-DEL-GST
L'Oreal India Pvt Ltd Vs UoI
GST - Petitioner challenges the order dated 23 June 2022 of the National Anti-Profiteering Authority - 2022-TIOL-26-NAA-GST - Petitioner submits that the application filed by Secretary, NAA to the Standing Committee is not a valid initiation of proceedings; that NAA is not netting of the benefit of rate reduction extended in some products as against those where the petitioner has not extended the benefit of rate reduction qua the subject products, by way of commensurate reduction in prices, and therefore, while it is being punished for being a 'bad boy', it is not being rewarded for being a 'good boy'; that even though in some products they have not been able to grant commensurate reduction in prices, yet they have tried to pass on the benefit by way of increase in grammage of the product; that petitioner has given post sale discount (Ex.GST) to the tune of Rs.73.59 crores, and therefore, this amount should be reduced from the total profiteered sum of Rs.186,39,57,058/- .
Held: Court is of the prima facie view that Section 171 is not a charging or a taxing provision - On the contrary, it is an incidental provision in the CGST/SGST Acts, for the purpose of ensuring that the object of these Acts, namely, eliminating the cascading effect of taxation on the consumer is achieved and any benefit of rate reduction of taxes or input tax credit benefit is passed on to the recipient without the middleman taking advantage of the Governments forgoing their taxes for the end consumer - In that sense, this provision is in the nature of a consumer welfare provision - Consequently, the aforesaid provision would have to be liberally construed and constructed in a manner which is directed towards furthering consumer and public interest - Rule 128 of the Rules, 2017 nowhere prescribes that the applicant who is making the written application/complaint must also be the recipient of the goods or services, on which commensurate reduction in prices have not taken place - Consequently, prima facie, the Secretary, NAA, would qualify to make an application under Rule 128 which permits 'any other person' to make such an application - Section 171 of the CGST Act, 2017 casts an obligation on every supplier of goods and services/registered person to pass on the benefit of rate reduction of GST or the benefit of ITC on every supply and not on some supplies - Consequently, prima facie , a supplier cannot claim that he has passed on more benefit to one customer, therefore, he could pass less or no benefit to another customer than the benefit which is actually due to that customer - Moreover, Court is also of the prima facie view that the post-sale discount has not been granted on account of GST rate reduction and, therefore, does not qualify as commensurate reduction in prices as required under Section 171 of the Act - Court is also of the view that under Section 171 any benefit of reduction in rate of taxes or benefit of input tax credit on any supply of goods or services can only be by way of commensurate reduction in prices - When a statute clearly provides for a manner in which something is to be done, and a duty is cast upon the supplier to extend the benefit of rate reduction by way of commensurate reduction in prices, the supplier cannot insist that instead of reducing prices, he will give extra grammage of the product - Court directs the petitioner to deposit the principal profiteered amount after deducting the GST imposed on the net profiteered amount in six equated instalments commencing 10th October, 2022 - The interest amount directed to be paid by the respondents as well as the penalty proceedings and further investigation by NAA in respect of other products sold by the petitioner are stayed till further orders - Matter to be listed on 19 October 2022: High Court [para 13, 14, 15, 16, 18, 19]
- Matter listed: DELHI HIGH COURT
2022-TIOL-119-AAR-GST
VBC Associates
GST - Electrical Energy is goods classified under HSN 2706 and exempted by Notification No. 02/2017-CTR vide Sl. No. 104 - Therefore, electrical energy generated by Solar Panel installed by the applicant is exempted goods supplied to tenants and consequently input tax paid on the Solar Panels are ineligible as credit of input tax on Capital Goods used exclusively for supply of exempted supply are not eligible under Section 17(2) read with Rule 43(a) - Question of further deliberation whether Solar Panels are covered under blocked credit as per section 17(5)(c) and (d) does not arise: AAR
- Application disposed of: AAR
2022-TIOL-118-AAR-GST
Zydus Lifesciences Ltd
GST - Provision of Services of transport and canteen facility to its employees is as per the contractual agreement between the employee and the employer in relation to the employment - Such provision of the services of transportation and canteen facility cannot be considered as supply of goods or services and hence cannot be subjected to GST in view of clarification issued vide Circular No. 172/04/2022-GST dated 06.07.22 - Held, therefore, that subsidised deduction made by the Applicant from the employees who are availing food in the factory/corporate office would NOT be considered a supply under the provisions of Section 7 of the Act, 2017: AAR
- Application disposed of: AAR
