Clean chit to Flipkart in excess GST collection case

New Delhi: The National Anti-Profiteering Authority (NAA), the consumer protection watchdog under GST, has asked its audit wing to check if online retailers like Amazon and Myntra have passed on benefits of lower tax rates even as it dismissed a case of alleged profiteering against Flipkart.

Disposing the case against Flipkart, the NAA in its order said the authority is conscious of the fact that there may be several cases in which e-commerce firms had collected excess GST from buyers and have not refunded the same after the tax was reduced on various products on November 15 last year.

“Therefore, it has already directed the Director General of Audit, Central Board of Indirect Taxes and Customs (CBIC) …to audit the major e-platforms and submit its findings to the authority,” the NAA order said.

In the case of Flipkart, the e-commerce company had charged 28 per cent GST on 7,254 orders which were placed on their platform by various buyers before November 15, 2017 and in which the supply was made after reduction of GST to 18 per cent. The company has maintained that it is refunding the excess tax collected from buyers.

In a massive relief for common man, the GST Council had last year slashed tax rates for over 200 items including chocolates, beauty products, sanitary ware, leather clothing and wigs.

It also made eating out cheaper by cutting rates for all restaurants to 5 per cent.

Soon after this, the Union cabinet approved setting up of the NAA to ensure companies pass on the benefits of reduced tax rates under GST to customers.

The authority has so far received hundreds of complaints in which consumers have alleged that suppliers of goods and services had not passed on the benefits to customers. Many of them, however, did not find enough merit to be taken up further.

One of the major companies that are under investigation for alleged profiteering is Hindustan Uniliver (HUL).

The Directorate General of Safeguards, the investigative arm of the NAA, had in January served profiteering notice to the company for allegedly not passing on GST tax rate reduction benefit to consumers.

It sought details from HUL about the prices of its entire range of products pre and post GST rate cut in November last year.

Incidentally, the four cases which were investigated and in which NAA has given its order are in favour of ompanies.

Apart from Flipkart, the other three companies that have got clean chit from the anti-profiteering authority are Schindler India, KRBL and Vrandavaneshwree Automotive (a Honda car dealer).