Goods and Services Tax

Maggi – the 10th case for National Anti-Profiteering Authority

Goods and Services Tax – GST – By: – Prasanna CP – Dated:- 11-10-2018 – SHRI ANKUR JAIN, DIRECTOR GENERAL ANTI-PROFITEERING, CENTRAL BOARD OF INDIRECT TAXES & CUSTOMS, VERSUS M/S. KUNJ LUB MARKETING PVT. LTD. [ 2018 (10) TMI 510 – NATIONAL ANTI-PROFITEERING AUTHORITY ] The National Anti-Profiteering Authority has issued several order in the consumer sector addressing issues with respect to passing the benefits of reduction in GST rates to consumer by way commensurate reduction in selling price. Let us discuss about the recent order issued by the authority on sale of Maggi. Background of the case: A consumer has purchased Maggi Noodle packs, each weighing 35 grams having MRP of ₹ 5 from the seller. Prior to 15.11.2017, the seller was charging 18% GST on the product s base price of ₹ 3.96 per pack, however, after the GST rate was reduced from 18% to 12% with effect from 15.11.2017, the Seller had started charging 12% GST on the product s increased base price of ₹ 4

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rough other packs of Maggi Noodles having different basic weights. The Respondent had further submitted that in the case of the product the price reduction would have been around 21 paise to the retailer and around 25 paise to the ultimate consumer which would have been inconvenient to both the retailer and the consumer due to legal tender issue, whereas on Maggi Noodles pack of 70 grams bearing MRP of ₹ 12 per pack, the benefit on account of GST rate reduction for the retailer would have been approximately 56 paise against which the respondent had reduced the price by 92 paise with reduced MRP of ₹ 11 and thus, the benefit in respect of ₹ 5 MRP pack had been passed on by reducing the price of other packs of Maggi Noodles by more than what was required. Therefore, the Respondent had claimed that the benefit of GST rate reduction had been passed on in respect of Maggie Noodles as a whole. Absence of clarity in rules: Before arriving at the conclusion the DGAP noted tha

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f the CGST Act, 2017 in this case? If yes, then what was the quantum of profiteering? After careful examination of DGAP s report and submissions from both applicant and respondent, the following observations were made by the Anti-Profiteering Authority. Product of concern MRP per pack Period of sales: 1st Nov to 14th Nov 2017 Period of sales: 15th Nov 2017 to 28th Feb 2018 Amount charged Base price GST rate Amount charged Base price GST rate Maggi 35 grams 5 4.67 3.96 18% 4.67 4.17 12% The respondent is required to reduce the MRP of the product by taking into effect of the reduction in rate of tax. The respondent further required to fix the MRP as per the provisions of the Legal Metrology (Packaged Commodities) Rules, 2011. As per rule 2(m) retail sale price means the maximum price at which the commodity in packaged form may be sold to consumer and the price shall be printed on the package after taking into account the fraction of less than fifty paise to be rounded off to the precedin

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