Samsung Holds Rate Cut GST Benefits; Fined Heavily by NAA

Samsung being under the tax radar for long has finally been penalized with the whooping sum of Rs. 3.7 million for not passing on the tax benefits to the customers. Samsung is the star electronic manufacturing brand prevailing in India with not less than 50% current user base.

The government has recently announced the rate cut on the sales of 32 inches LED TV from earlier 28% to the current 18%. The 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 has found Samsung guilty for not reducing the rates of 32-inch television sales following the rate cut on the product. Adding on to that the company is also deemed of not reducing the rates of power banks worth Rs 29,736.

GST council in its latest meeting Get to know about GST (Goods and Services Tax) council 1st to 38th meeting updates and decisions taken by members. We have covered 1st meeting to last meeting decisions announced the rate cut in 26 inches LED TV up to 32 inches LED TV. While the rate cut (from 28% to 18%) on power banks was announced on January 1, 2019.

“The prices of products affected by the rate reduction were not decreased commensurately. Hence, it was a violation of Section 171(1) of the CGST Act 2017,” the NAA said in its order.

The order further added that an increase in the cost (if any) should have been noted before 31 December 2018 and prices would have been increased simultaneously. However, it is not valid that the company has increased the prices on the intervening night of 31 Dec 2018 and January 1, 2019 (at the time of rate cut announcement). Following the announcement of rate reduction company increased the prices of its gadgets. The act is not worthy to be called a coincidence and thus it is proved that the respondent had increased prices for appropriating the benefit of tax reduction, the order said.

NAA further assured that the profiteered amount by the company is duly deposited to the consumer welfare funds (state and central level) gave instructions for the same to central GST and State GST departments 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.

Defending itself, Samsung said that the case is uncertain as the applicants have duly submitted screenshots of online prices without the proof of actual supply. Samsung added that the TV model was being sold on Amazon.in (the online market). That the company was not the supplier umbo Distributors Pvt Ltd and EP Electronic Paradise Pvt Ltd were.

NAA mechanism involves three stages of investigation and has a state screening committee for local complaints and the standing committee for National level compliance. The investigation is done by the directorate general of anti-profiteering and inquiry is made by the decision-making body, the NAA.

Nestle and Johnson & Johnson are other such brands that have already challenged the orders of NAA in the high court and got a temporary stay.