Indian Tax Solution

Lifestyle To Refund Rs 41 To Customer For Not Passing Lower GST Rate Benefit

The National Anti-Profiteering Authority has ordered retail chain Lifestyle International Pvt Ltd. to pay Rs 41 along with 18 percent interest to a customer for issuing incorrect invoices and not passing the benefits of a reduced Goods and Service Tax.

In its order, the authority said that the retail chain had profiteered to the extent of Rs 15,861 by selling two shades of the cosmetic Maybelline Fit Me foundation at the old GST rate of 28 percent, which in Nov. 2017 was reduced to 18 percent. The retail chain has been ordered to deposit the amount to the Consumer Welfare Fund of the Centre and state government concerned.

The authority, in its order said that a consumer complained against the retail chain's store at the Mahagun Metro Mall in Vaishali, Ghaziabad, for not passing on the benefit of tax reduction on a purchase of the product made on Nov. 22, 2017. The customer's application was subsequently referred to the Director General of Anti-Profiteering.

The order said that the Director General asked the store to provide copies of its balance sheets, GST returns and details of outward taxable supplies.

An examination of the store's submitted replies, the order said, revealed that it was "not in a position to correlate the invoice with the maximum retail price label". The store was also found to have increased the basic price per unit of the product.

The order said: "The Respondent (the store) is directed to reduce the price of both the shades of the product to Rs 410/- and Rs 449/-, respectively excluding GST."

Since the retailer profiteered to the extent of Rs 41 on selling the product to the complainant, it must refund the customer the amount along with 18 percent interest.

"The respondent himself has admitted... in his submissions that an amount of Rs 1.98 crore might not have been passed on to the individual buyers," the order said, adding that the "Director General is directed to investigate the claim and submit a report".


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