NEW DELHI: Cracking down on Samsung India for not passing on the benefits of a cut in goods and services tax (GST) on television sets and power banks to consumers, the National Anti-profiteering Authority (NAA) has slapped a penalty of Rs 37.85 lakh on the company.
Acting on a complaint filed by one Rahul Sharma through Local Circles, the authority said that the electronics major was fined for not reducing the selling price of 32-inch LED TV 32FH4003 despite a cut in GST rates to 18 per cent from 28 per cent on television sets, effective January 2019, in addition to a fine of Rs 29,736 which was also imposed on the company for not reducing price of power banks.
"The prices of the products affected by the rate reduction were not decreased commensurately, hence violating section 171 (1) of the CGST Act 2017," NAA stated in its order dated February 27, a copy of which was reviewed by this publication.
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 NAA further said in its order that Samsung India had increased prices for appropriating the tax reduction "with the intention of denying the benefit to consumers".
Calling the case arbitrary, Samsung argued that the said TV model was being sold on Amazon.in, a third party marketplace, and Samsung was not the supplier of the TV. Jumbo Distributors Pvt Ltd and EP Electronic Paradise Pvt Ltd were suppliers of the TV sets, according to Samsung.
However, in the complaint filed by the applicant, the supplier was Samsung India Electronics Pvt Ltd and the price of the 32-inch LED TV model remained the same even after January 2019, stated the Director General of Anti-Profiteering.
Samsung will have to deposit the amount within three months from the passing of the order, failing which the amount would be recovered by the commissioners concerned of CGST and SGST, said the order dated February 27.