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Patanjali dealer fined for not passing on GST rate cut to consumers

The dealer further argued that he had only charged 5 per cent commission which he had been doing since before GST came to force, adding that he did not profiteer.

twitter-logoBusinessToday.In | January 30, 2019 | Updated 13:29 IST
Patanjali dealer fined for not passing on GST rate cut to consumers
PC: Reuters

A dealer of Patanjali Ayurveda has been held by the National Anti-profiteering Authority (NAA) for not passing on the benefits of duty reduction to his customers. The GST profiteering watchdog has asked the dealer to deposit the undue profit made with the Consumer Welfare Fund. The dealer has been asked to deposit Rs 6.06 lakh along with an interest of 18 per cent liable from the date this amount was realised by him from his customers till the date he deposits it in the Consumer Welfare Fund.

The dealer has been accused of increasing the base price of a product called Beauty Cream 50 GM by Patanjali. The GST rate on such products were lowered to 18 percent from 28 percent with effect from November 16, 2017 but the Delhi-based Satya Enterprises increased the base price of the product after the tax was lowered to keep the MRP same as before.

The respondent argued that the MRPs were fixed by the manufacturer and could not reduce it on his own. The NAA argued that he was bound to reduce the MRPs on products sold by him post November 15, 2017, keeping in mind the "the reduction in the rate of tax as he was a registered under the CG3T/SGST Acts and thus he was legally bound to faithfully implement the provisions of Section 171 of the above Act being the supplier of the goods," as mentioned in a report in The Hindu.

The dealer further argued that he had only charged 5 per cent commission which he had been doing since before GST came to force, adding that he did not profiteer. Investigations, on the other hand, showed that he had increased the base prices of 109 products, forcing his customers to pay more.

The dealer has been asked to pay the amount within a period of 3 months from the date of receipt of this order.  

According to experts quoted by the daily, taking a plea of having no control over MRPs as fixed by the manufacturers are not going to absolve traders from their legal obligation to pass on GST benefits to customers.

(Edited by Anwesha Madhukalya)

Also read: 7th Pay Commission: Allowances hiked for teachers and equivalent academic cadre

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