SOURCE :- SIASAT NEWS
Hyderabad: Every bottle of Rail Neer sold at Rs 15 after GST came into force carried a tax benefit that never reached passengers, the Goods and Services Tax Appellate Tribunal (GSTAT) has held, ordering the Indian Railway Catering and Tourism Corporation (IRCTC) to pay Rs 50.4 crore.
The order was pronounced on Wednesday, October 14, and IRCTC informed the stock exchanges on Thursday, October 15. According to The Times of India, Andhra Pradesh accounts for Rs 1.83 crore of the amount and Telangana for Rs 27.8 lakh. Maharashtra has the largest share at Rs 10.46 crore, followed by Uttar Pradesh at Rs 7.48 crore and Delhi at Rs 5.79 crore.
IRCTC has one month to deposit the money, with 18 per cent interest from June 28, 2019. Half goes to the Central Consumer Welfare Fund and half to the respective state funds. Any state or Union Territory without a fund will have its share and interest sent to the central fund. A 10 per cent penalty applies unless the full amount and interest are paid within 30 days.
Why IRCTC lost
IRCTC’s main defence was that the railway ministry fixes the maximum retail price (MRP), leaving it no room to cut prices. The tribunal agreed that IRCTC could not change the MRP but said it controlled the transfer price at which it supplied water to railway departments and licensee-run units. That price, the bench held, had to come down once the tax fell.
The bench also ruled out the argument that government enterprises or subsidised supplies are exempt. Section 171 of the Central Goods and Services Tax (CGST) Act makes no such exception, it said. Water served on premium trains cannot be called complimentary either, because its cost is part of the ticket fare.
IRCTC had also said Rail Neer sold at 25 per cent below rival brands, that its base price rose with costs, and that it shares 15 per cent of profits with the ministry. None of this changed the outcome.
The tribunal also kept the investigation period and the calculation method intact. It refused IRCTC’s request to leave out seven plants commissioned after GST was introduced, since the same prices applied across plants.
How the case began
The case rests on a June 11, 2021 report by the Directorate General of Anti-Profiteering (DGAP) covering supplies from July 1, 2017, to May 31, 2020. TOI reported that it began with a complaint from Neeraj Kansal, then commissioner of CGST and central excise, Audit Thane, who alleged that IRCTC kept the MRP at Rs 15 despite the lower tax.
State and Union Territory-wise profiteered amounts, including the tax component
Andhra Pradesh: Rs 1,83,02,944
Assam: Rs 12,45,657
Bihar: Rs 2,38,07,317
Chandigarh: Rs 1,47,388
Chhattisgarh: Rs 2,58,76,376
Delhi: Rs 5,79,15,625
Gujarat: Rs 1,94,74,135
Haryana: Rs 27,91,578
Jammu & Kashmir: Rs 3,93,243
Jharkhand: Rs 17,85,582
Karnataka: Rs 3,25,82,760
Kerala: Rs 3,34,84,442
Madhya Pradesh: Rs 1,12,73,156
Maharashtra: Rs 10,46,34,791
Odisha: Rs 1,51,120
Punjab: Rs 30,36,893
Rajasthan: Rs 74,18,128
Tamil Nadu: Rs 5,65,05,078
Telangana: Rs 27,84,944
Uttar Pradesh: Rs 7,48,23,738
Uttarakhand: Rs 6,00,329
West Bengal: Rs 2,51,09,238
Total: Rs 50,41,44,461
SOURCE : SIASAT
