Philips to Pay Penalty as Per NAA for Not Giving GST Benefits to Consumers

As per recent updates received yesterday, Philips India was found guilty by the GST anti-profiteering authority for not providing benefits of the GST rate Grab the information of revised GST slab rates on consumer products in India, Although GST council finalized the slab rates like 5%, 12%, 18% and 28% cut which is estimated over Rs 4.53 lakh to consumers. In this matter, the Directorate General of Anti Profiteering (DGAP) had been ordered by the National Anti-Profiteering Authority (NAA) to investigate into the complaint against the MNC firm for not cutting out the cost of its ”Food Processor” after the introduction of the GST regime from 1st July 2017.

The DGAP noted that after the incorporation of the GST Regime the applicable tax rate on the food processor was reduced from 29.80% to 28%. In this matter, Philips India was importing the food processor from a foreign country and thus they were paying 12.5% countervailing duty on the MRP along with Value Added Tax in between 12.50 to 15.95 %. Hence in the pre-GST era, they were paying average tax at 29.80 percent. The NAA said in its order that “It is observed that DGAP has computed the amount of profiteering (between July 1, 2017, to December 31, 2018) based on documents/data provided by the Respondent (Philips India) himself. Therefore, we hold that the Respondent has profiteered by an amount of Rs 4,53,949,”.

After observing the matter, the authority ordered Philips to deposit the amount of profiteering with an 18 percent interest in the Consumer Welfare Fund within three months. 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 through the released order said that “Philips India has been engaged in the supply of several other products, prices of which have been impacted at the time of introduction of GST”.

The NAA also addressed DGAP and directed them to conduct an investigation concerning all the other impacted products which have been supplied by Philips India and also represent a very detailed and clear report. The order further states that “Since the DGAP has established that the Respondent has contravened the provisions of Section 171 of the CGST Act 2017 while selling the product “Food Processor”, it becomes inevitable to investigate the profiteering aspect in respect of other impacted products too which have been supplied by the Respondent,”.