Lifestyle International penalized for withholding GST benefits

The national anti-profiteering authority (NAA) has penalized retailer Lifestyle International for not reducing the prices of a product even after a reduction in GST rates. This is the second such order against a company by NAA which penalized Pyramid Infratech recently for failing to pass on GST benefits to homebuyers.

This is significant as the onus has now been firmly placed on firms to calculate the GST benefits accruing to them and passing them on to consumers. NAA, in an order dated 25 September, upheld a complaint that a Lifestyle International cosmetic product failed to reflect the GST rate cut to 18% from 28% effected in November 2017.

It directed the firm to pay the difference in price along with 18% interest to the petitioners. It also directed the company to deposit the profiteering amount in cases where consumers cannot be identified in the consumer welfare fund.

“The Authority held that it will not be involved in arithmetic calculations, and hence, prescribed mechanism to determine profiteering is essential due to wide diversity for different sectors. The question of constitutional validity and arbitrariness/vagueness of provisions will continue to plague the industry for the months ahead,” he said in a note.