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Notice to Samsung for not passing GST cut benefit to consumers
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SME Times News Bureau | 18 Apr, 2019
The Directorate General of Anti-Profiteering has served a notice to
technology major Samsung India for allegedly not passing on the benefits
of GST reduction to its customers and in turn making undue profits,
sources said.
The notice, sources said, was served on the basis
of a complaint which alleged that the company was not transferring the
rate cut in the Goods and Services Tax (GST) on television sets to the
consumers.
In December, the GST Council reduced the tax rate on
televisions with screen sizes of up to 32 inches to 18 per cent from 28
per cent, which came into effect on January 1, 2019. Earlier, only the
television sets with screens up to 26 inches were in the 18 per cent tax
slab.
The anti-profiteering body, which functions under the GST Council, has also sought documents of sales made by the company.
Despite repeated messages and phone calls, Samsung spokesperson could not be reached for comment.
Company
sources, however, confirmed the notice from anti-profiteering body but
put the blame squarely on channel partners for not passing on the
benefit of lower duty to consumers.
They said the company has no
control over partners some of whom might not have effected price cuts
based on duty revision. At the company level, they said, pricing of all
products was revised downwards post duty cuts and products were supplied
to partners at lower per unit cost.
Non-transmission of rate
cuts to consumers violates Section 171 of the Central Goods and Services
Tax Act which mandates that any reduction in tax rates on goods and
services or benefits of input tax credit should be passed on to
customers through reduction in prices.
The duty of the
anti-profiteering agency is to conduct investigation and collect
evidence necessary to determine whether the benefit of reduction in the
rate of tax on any supply of goods or services or the beneit of input
tax credit has been passed on to the recipient by way of commensurate
reduction in prices, in terms of Section 171 of the CGST Act, 2017.
Several companies have faced action from the anti-profiteering body over numerous complaints filed by consumers.
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