NAA penalizes Patanjali for not passing GST benefits to consumers

The National Anti-Profiteering Authority (NAA) has imposed a fine of Rs 75.08 crore on Patanjali Ayurveda Ltd for not passing the benefits of GST rate reduction on to the consumers. As per the reports, the NAA has said that Patanjali had increased the price of their washing powder after GST reduction.

“The respondent (Patanjali) has denied the benefit of tax reduction to consumers in contravention of the Central GST Act,therefore a showcase notice be issued directing it to explain why the penalty should be imposed,” stated NAA. The NAA has further stated that the benefits of rate change from 28% to 18% and from 18% to 12% that it implemented in November 2017 have not been passed on to the consumers.
Patanjali has argued that they bore the cost of rate increase when compared to the pre-GST regime and did not pass the cost of increased prices onto the consumers. The NAA did not accept this on the grounds that Patanjali took a business call to not increase prices and that this cannot be a reason for not giving GST reduction benefits to the consumers.

NAA said, “The contention is not correct since the authority or DGAP has not acted as a price controller or regulator. The authority has only been mandated to ensure that benefits of tax reduction and ITC are passed on to end consumers who bear the burden.”