DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,
SAHIBZADA AJIT SINGH NAGAR (MOHALI)

Consumer Complaint No.736 of 2017
Date of institution: 11.09.2017
Date of decision : 25.05.2018
Sarabjit Kaur wife of Kulwinder Singh, resident of K. No.86 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 jean having MRP of Rs.2,399/- inclusive of all taxes.
Discount on the product was given and thereafter retail invoice bill for
amount of Rs.1343/- including Rs.143.94 N.P. as GST @ 12% 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

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was disclosed to complainant that in case GST not paid, then he will not
be allowed to buy the jean. 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.143.94 N.P.
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.2,399/- inclusive of all taxes and after giving discount of 50%,
the discounted price was Rs.1199.50 N.P. It is admitted that CGST and
SGST of Rs.143.94 N.P. 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

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the 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.2,399/- inclusive of
all taxes and the same is also mentioned in copy of the tag Ex.C-2.
Admittedly discount @ 50% was offered and the discounted price was

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Rs.1199.50 N.P. However, on this discounted price, SGST of amount of
Rs.71.97 N.P. and CGST of amount of Rs.71.97 N.P. 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.143.94 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

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from the recipient of goods/services. Even if the provisions of GST
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

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laid down in the above cited cases. Therefore, OP bound to refund this
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.143.94 N.P. 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