Court Buzz, GST

NAA withdraws notice issued for imposition of penalty under Section 122 (1) (i) CGST Act.

Case: M/s. Pinky Sales Pvt. Ltd.

Forum: National Anti-Profiteering Authority

Facts

The DGAP held that the Respondent had not passed on the benefit of rate reduction when the rate of GST was reduced from 18% to 5% on the foot wear (Shoes), as per the provisions of Section 171 (1) of the CGST Act, 2017. The profiteered amount to be paid by the Respondent was determined at Rs. 6,55,307/-.

It was also held that the Respondent had committed an offence under Section 122 (1) (i) of the CGST Act, 2017 and hence, he was liable for imposition of penalty accordingly.

Key points

The NAA concluded that from the perusal of Section 122 (1) (i) it is clear that the violation of the provisions of Section 171 (1) is not covered under it as it does not provide penalty for not passing on the benefits of tax reduction . Hence the penalty cannot be imposed for violation of the anti-profiteering provisions made under Section 171 of the CGST Act.

The penalty provisions were added for violation of the provisions of Section 171 (1) w.e.f. 01.01.2020, by inserting Section 171 (3A). The NAA thus withdrew the notice issued to the Respondent for imposition of penalty under Section 122 (1) (i) as the penalty provisons cannot be imposed retrospectively.

Vox Analytica GST
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