Home      Free WhatsApp Updates      Services      Subscription Plans
🔒 Login    
Subscription Plans   
Taxreply tweets
GST News
About GST Library
E-Books
Subscription Plans
Offers New
GST Case Laws
GST Notifications / Circulars
GST Act / Rules
GST Act / Rules (Amendments)
GST Rates
Classification (Chapter Wise)
Classification (Search Tool)
GST Set-off Calculator
Full Site Search
National Anti-Profiteering Authority
GST Forms   
E-way Bill
Finance Bill
GST Amendment Statistics

Penalty proceedings dropped by National Anti Profiteering Authority for non existence of penalty provision under section 171 prior to 01st January 2020.

Authority held that since penalty provision for contravention of section 171(1) was inserted in law by Finance Act (No. 2), 2019 w.e.f. 01.01.2020, therefore penalty prescribed u/s 171(3A) cannot be imposed for period prior to 01.01.2020.
 

In Re:

SH. SANDEEP KUMAR AND OTHERS vs. M/S. NANI RESORTS AND FLORICULTURE PVT. LTD.

SH. PAWAN KUMAR AND OTHERS vs. M/S. S3 BUILDWELL LLP 

SH. VASANTBHAI BHIKABHAI PATEL vs. M/S. SHREE INFRA

SHRI ANKUR JAIN vs. KUNJ LUB MARKETING PVT. LTD

SH. PRANESH PATHAK vs. M/S. BHUTANI INTERNATIONAL MEDICOS

SH. RATISH NAIR vs. M/S. MAN REALTY LTD

KERALA STATE SCREENING COMMITTEE ON ANTI-PROFITEER.. vs. M/S. VTWO VENTURES

MS. PALLAVI GULATI AND SH. ABHIMANYU GULATI vs. PURI CONSTRUCTIONS PVT. LTD

 

Section 171 - Anti profiteering measure.

171.

(1) Any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices.

(2) The Central Government may, on recommendations of the Council, by notification, constitute an Authority, or empower an existing Authority constituted under any law for the time being in force, to examine whether input tax credits availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him.

(3) The Authority referred to in sub-section (2) shall exercise such powers and discharge such functions as may be prescribed.

Inserted by THE FINANCE (NO. 2) ACT, 2019 w.e.f. 01.01.2020

(3A) Where the Authority referred to in sub-section (2), after holding examination as required under the said sub-section comes to the conclusion that any registered person has profiteered under sub-section (1), such person shall be liable to pay penalty equivalent to ten per cent. of the amount so profiteered:

Provided that no penalty shall be leviable if the profiteered amount is deposited within thirty days of the date of passing of the order by the Authority.

Explanation.—For the purposes of this section, the expression “profiteered” shall mean the amount determined on account of not passing the benefit of reduction in rate of tax on supply of goods or services or both or the benefit of input tax credit to the recipient by way of commensurate reduction in the price of the goods or services or both.

 

Respondent's Submission

The Respondent submitted that the penal provisions under Section 171(3A) of the CGST Act read with Rule 133(3)(d) of the CGST Rules should not be invoked and penalty should not be imposed as the Central Government vide Notification No. 01/2020- Central Tax dated 01.01.2020 has appointed the 1st day of January. 2020 as the date on which the provisions of Section 92 to 112 of the Finance (No. 2) Act, 2019 shall come into force.

Respondent further submitted that provisions of Section 171(3A) inserted vide Section 112 of the Finance Act, 2019 are effective prospectively from 01.01.2020 and they cannot have retrospective operation. 

Held by Authority

We have carefully considered the submissions of the Respondent and all the material placed before us and it has been revealed that respondent has violated the provisions of Section 171(1) of the CGST Act, 2017.

It is also revealed from the perusal of the CGST Act and the Rules framed under it that the Central Government vide Notification No. 01/2020 - Central Tax dated 01.01.2020 has implemented the provisions of the Finance (No. 2) Act, 2019 from 01.01.2020 vide which sub-section 171(3A) was added in Section 171 of the CGST Act and penalty was proposed to be imposed in the case of violation of Section 171(1) of the CGST Act, 2017.

Since no penalty provisions were in existence prior to 01.01.2020, when the Respondent had violated the provisions of Section 171(1), the penalty prescribed under Section 171(3A) cannot be imposed on the Respondent retrospectively. 


Subscribe to Complete GST Library

Share this article.
Published by

TaxReply

on Sep 3, 2020

Comments


Very good matter
By: Ynvkssatyanarayana | Dt: Sep 4, 2020


Post your comment here !


2985