NAA Fined Patanjali for Not Transferring GST Benefits

National Anti-Profiteering Authority (NAA) fined Baba Ramdev’s Patanjali Ayurved Ltd. a total of INR 75.08 crores for the company’s not transferring the benefits of reduction in the rates of Goods and Services Tax (GST). According to sources, the NAA said that the company increased the price of their washing powder even after the rates of the indirect tax, GST, were reduced by the government.

According to the reports provided by Economic Times, the amount of fine, along with 18% GST, will be deposited by the company to the Consumer Welfare Fund Central Board of Indirect Taxes and Customs (CBEC) has notified that the Consumer Welfare Fund constituted under Goods and Services Tax (GST). Read More of the State and Central Governments as directed by NAA.

The respondent (Patanjali) has denied the benefit of tax reduction to consumers in contravention of the Central GST Act Get the brief introduction of SGST, IGST and CGST. We have mentioned their full forms, meanings and adjustments of input tax credit under GST in India, therefore a show-cause notice be issued directing it to explain why the penalty should be imposed,” said NAA. It also said that the fine was imposed because although the rates were reduced, the company did not transfer the benefit of reduction from 28% to 18% and from 18% to 12%, to their customers, instead, they increased the price of their detergent.

Patanjali, in its defense, said that the company had tolerated the rise in tax rates before the GST was even introduced. The company said that they did not increase the prices of their products even after the tax rates were increased so what they did later by not passing the benefits to the customers was justified. NAA in response did not accept this excuse saying that these arbitrary decisions of the company were unprofessional. National Anti-profiteering Authority (NAA) Get to know about complete guide of the anti-profiteering rules under GST in India. Also, we have attached Indian government provisional orders also said that the company’s business call to not increase the prices was not a valid reason for not transferring the benefits of current reductions to the customers. When this argument failed, Patanjali’s counter-argument that NAA’s investigation was a violation of its business right, was also rejected by the authority.

“The contention is not correct since the authority or DGAP has not acted as a price controller or regulator,” the NAA said, adding that, “The authority has only been mandated to ensure that benefits of tax reduction and ITC are passed on to end consumers who bear the burden”.

The company’s compliance report is to be filed by the Director-General Anti-Profiteering (DGAP) within 4 months.