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National Anti-Profiteering Authority’s failure to lay down
or standardize methodology and procedure to
determine instances of profiteering, taken note by High
Court — Notice issued
Madras High Court Bench comprising Hon’ble Ms. Justice Dr. Anita
Sumanth, in its interim order dated 28-1-2020 in W.P. Nos. 1904 & 1745 of 2020
and WMP Nos. 2231 & 2023 of 2020 has taken cognizance of plea of petitioner
regarding non-laying down or standardizing methodology and procedure to de-
termine instances of profiteering by National Anti-Profiteering Authority
(NAPA) as envisaged under Rule 126 of CGST Rules, 2017 and has issued notice
to Central Government to respond. In the petitions, it was specifically pleaded
that said Rule clearly sets out the power of Authority to formulate the methodol-
ogy and procedure for determining profiteering measures which has not been
done and that in absence of prescribed procedure, the determination of the au-
thority varies from case to case with relevant factors not being taken into account
to effectively and scientifically determine profiteering or otherwise. Additionally
in one of writ petition, the complainant had withdrawn the complaint despite
which the investigations continued. The investigation proceedings in both writ
petitions has been stayed till final outcome of case. — G.S.T.L. Bureau.

GST Valuation — Income Tax of 1% collected under
Section 206C(1F) of Income Tax Act, 1961 on sale of
Motor Vehicle exceeding value of ` 10 lakh, whether
includible in Transaction Value under Section 15 of
CGST Act?
A very interesting question on GST valuation has come up before High
Court of Kerala Bench at Ernakulam in WP(C) No. 5944 of 2019 (P) filed by M/s.
Vision Motors Pvt. Ltd. The petitioner, a car dealer, collects an amount of 1% of
sale value from buyer as Income Tax in terms of Section 206C(1F) of Income Tax
Act, 1961 if value of car exceeds ` 10 lakh. The issue is whether this amount of
1% is includible in assessable value for payment of GST in terms of Section 15(2)
of CGST Act, 2017 which mandates that the value of supply shall include any
taxes, duties, cesses, fees and charges levied under any other law in force. Peti-
tioner has pleaded that in collecting aforesaid Income tax, he acts only as an
agent for the State and that amount eventually goes to the vehicle purchaser’s
credit. In other words he does not charge it and hence it is not includible in value
for payment of GST which is being demanded by the department.
Taking note of aforesaid pleadings, the High Court Bench comprising
Hon’ble Mr. Justice Dama Seshadri Naidu, in its interim order dated 27-2-2019
has opined that issue raised by petitioner requires, prima facie attention of Court
and since matter needs further detailed adjudication, has directed department
not to proceed further with demand till disposal of writ petition. It was however
clarified that this arrangement was subject to outcome of the writ petition and
without prejudice to the rights of the Department in collecting the taxes in future
if the writ outcome is adverse to the petitioner. — G.S.T.L. Bureau.

GST LAW TIMES  14th May 2020  51