DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,
SAHIBZADA AJIT SINGH NAGAR (MOHALI)
Consumer Complaint No.734 of 2017
Date of institution: 11.09.2017
Date of decision : 25.05.2018
Rohit Kumar son of Sohan Lal, resident of House No.323, Near
Nirankari Bhawan, Phase-6, Mohali.
…….Complainant
Versus
Yougal Sons Fashions Pvt. Ltd. Shop No.75, 1 st Floor, The North
Country Mall, NH 21, Kharar, Mohali through its Proprietor/Incharge/
Manager.
……..Opposite Party
Complaint under Section 12 of
the Consumer Protection Act.
Quorum: Shri G.K. Dhir, President,
Shri Amrinder Singh Sidhu,
Mrs. Natasha Chopra, Member.
Present: Shri Kulwinder Singh, counsel for the complainant.
Shri Harpreet Saini, counsel for the OP.
Order by :- Shri G.K. Dhir, President.
ORDER
On 07.09.2017 complainant after visiting outlet of OP
purchased socks having MRP of Rs.457/- inclusive of all taxes. Discount
on the product was given and thereafter retail invoice bill for amount of
Rs.336/- including Rs.16/- as GST @ 5% was issued. This GST could
not have been charged, but despite that officials of OP claimed that they
are charging the same from every customer. It was disclosed to
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complainant that in case GST not paid, then he will not be allowed to
buy the shirt. Practice of charging GST on the discounted price alleged
to be an unfair trade practice and as such this complaint filed for
seeking refund of the extra charged amount of Rs.16/- with interest.
Compensation for mental harassment and agony of Rs.50,000/-
alongwith litigation expenses of Rs.33,000/- more claimed.
2. In reply filed by OP, it is admitted that MRP of the product
was Rs.457/- inclusive of all taxes and after giving discount of 30%, the
discounted price was Rs.319.90 N.P. It is admitted that CGST and SGST
of Rs.16/- was charged. Section 9 and Section 15 of Central GST Act,
2017 provides for levying tax by Central Govt. and the State Govt. on
sold goods. As per Section 15 of Central GST Act, 2017, the value of
supply of goods or services or both, shall be the transaction value,
which is the price actually paid or payable for said supply of goods or
services or both, where supplier and the recipient of the supply are not
related. Sales tax to be charged separately by the supplier. Further it is
claimed that Section 15 (3) of Central GST Act provides that value of
the supply shall not include any discount given before or at the time of
its supply, if such discount has been duly recorded in the invoice issued
in this respect of such supply. Even this value of supply shall not be
included in the discount after the supply has been effected, if such
discount is established in terms of agreement entered at or before the
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time of such supply and specifically linked to relevant invoices. Rather
the tax credit attributable to the discount, on the basis of
documents issued by the supplier has to be reversed by the recipient of
the supply. So GST is charged as per law. No illegality in such charging
committed by OP. Moreover the product in question was manufactured
prior to implementation of GST Act, which came in force w.e.f.
01.07.2017. Price charged from the customer includes all taxes if it does
not exceed MRP of the product sold. Final price charged from the
customer did not exceed MRP and as such no unfair trade practice
adopted by OP. Besides it is claimed that in view of involvement of
complicated questions of law and facts, the matter cannot be decided in
summary proceedings. GST @ 5% alleged to be rightly charged.
3. Complainant to prove his case tendered in evidence his
affidavit Ex.CW-1/1 alongwith documents Ex.C-1 and Ex.C-2 and
thereafter his counsel closed evidence. On the other hand, counsel for
the OP tendered in evidence affidavit Ex.OP-1/1 of Shri Manoj Sharma
authorised representative of the OP and thereafter closed evidence.
4. Written arguments not submitted by any of the parties. Oral
arguments heard and records gone through.
5. Admittedly MRP of the product was Rs.457/- inclusive of all
taxes and the same is also mentioned in copy of the tag Ex.C-2.
Admittedly discount @ 30% was offered and the discounted price was
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Rs.319.90 N.P. However, on this discounted price, SGST of amount of
Rs.8/- and CGST of amount of Rs.8/- has been charged, is a fact borne
from copy of invoice Ex.C-1 dated 07.09.2017. So virtually GST of
amount of Rs.16/- has been charged on the discounted price, despite the
fact that MRP was inclusive of all taxes. Practice of charging tax on the
discounted price having MRP inclusive of all taxes has been deprecated
by Hon’ble National Consumer Disputes Redressal Commission, New
Delhi in case titled as M/s Aero Club (Wood Land) through its
Manager Vs. Rakesh Sharma bearing Revision Petition No.3477 of
2016 decided on 04.01.2017 as well as in case bearing First Appeal
No.136 of 2017 titled as M/s Aero Club Vs. Ravinder Singh Dhanju
decided on 23.05.2017 by Hon’ble State Consumer Disputes Redressal
Commission, UT Chandigarh. Ratio of both these cases fully applicable
to the facts of the present case. So certainly OP adopted unfair trade
practice in charging GST on the discounted price in this case, resulting
in mental agony and harassment of complainant.
6. It is vehemently contended by counsel for OP that after
coming into force of provisions of Central GST Act, 2017, the value of
supply of goods or services or both to be taken as transaction value,
which is the price actually paid or payable for the said supply of goods
or services or both and as such GST has to be charged by the supplier
from the recipient of goods/services. Even if the provisions of GST
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enjoins seller to collect GST from the purchaser of the goods, despite
that the contract arrived at between consumer and supplier stands on
different footings than that of provisions of CGST Act. Provisions of
Consumer Protection Act are beneficial for the consumers and benefit of
same cannot be denied to the consumer in the garb of any other
provisions of law including CGST Act, 2017. As OP himself through tag
Ex.C-2 offered to sell the product on MRP inclusive of all taxes, and as
such virtually the offer to pay tax on the product binds the supplier to
pay tax on the discounted price because as and when the discount offer
is given on MRP of a product, then offer has to be specific that the taxes
will be charged extra. No such intimation of charging extra tax on the
discounted price of the product having MRP inclusive of all taxes, ever
given by OP to complainant or other customers and as such OP cannot
wriggle out of his obligation of selling the product on discounted price
inclusive of all taxes. No material in this case produced on record to
establish that OP communicated to complainant or other
consumer/customers that on the discounted price, GST will be charged
extra, even if MRP is inclusive of all taxes of such product. When
communication of such intention was never expressed by OP, then OP
cannot shift his burden to pay GST on the consumers. So act of charging
GST on the discounted price certainly is unfair trade practice as per law
laid down in the above cited cases. Therefore, OP bound to refund this
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amount with interest @ 6% per annum from the date of purchase till
payment. Complainant also entitled to reasonable amount of
compensation for mental agony and harassment and to litigation
expenses also.
7. As a sequel of above discussion, the complaint allowed with
direction to OP to refund excess charged amount of Rs.16/- with interest
@ 6% per annum w.e.f. 07.09.2017 till payment. Compensation for
mental agony and harassment of Rs.2,000/- and litigation expenses of
Rs.2,000/- more allowed in favour of complainant and against OP.
Payment of amount of compensation and litigation expenses be made
within 30 days from the date of receipt of certified copy of the order.
Certified copies be supplied to the parties as per rules. File be indexed
and consigned to record room.
Announced
May 25, 2018.
(G.K. Dhir)
President
(Amrinder Singh Sidhu)
Member
(Mrs. Natasha Chopra)
Member
