India’s National Anti-profiteering Authority (NAA) has slapped a penalty of Rs. 37.85 lakh on South Korean electronics major Samsung for not passing on the benefits of a cut in goods and services tax (GST) rates on television sets to consumers.
Samsung was fined for not reducing the selling price of 32-inch LED TV 32FH4003 despite a cut in GST rates to 18% from 28% on television sets. An additional fine of Rs. 29,736 was also imposed on the company for not reducing price of power banks, taking the total amount of fine to Rs. 37,85,342.
The Centre had cut rates on TVs and power banks at the recommendation of the GST Council, effective January 2019.
In an application filed before the standing committee on anti-profiteering in 2019, petitioner Rahul Sharma alleged that Samsung profiteered by not passing on the tax cut benefits to customers.
At the standing committee’s behest, the Director General of Anti-Profiteering (DGAP) had initiated a probe, asking Samsung to submit a reply or admit that they profiteered from the reduction in GST.
According to the NAA, Samsung had called the case arbitrary as applicants had submitted screenshots of price as listed on an online marketplace without giving any evidence to substantiate the supply actually took place.
Samsung also pointed out 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.
DGAP reported that 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.
“Under rule 129 of the Rules, the standing committee was satisfied that there was prima facie evidence to show that the supplier had not passed on the benefit of the reduction in the rate of tax to the recipients by way of commensurate reduction in prices,” DGAP stated.
DGAP arrived at the profiteered amount by comparing the average of the base prices of the 32 inch LED TV and the power bank supplied by the respondent through different supply channels during 01-11-2018 to 31-12-2018 with the actual invoice-wise base prices of the TV and power bank sold during 01-01-2019 to 31-03-2019. The excess GST so collected from the recipients also included GST charged on the increased base price.―Livemint