DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, SAHIBZADA AJIT SINGH NAGAR (MOHALI)
Consumer Complaint No.787 of 2017
Date of institution: 19.09.2017 Date of decision : 25.05.2018
Sukhdev Singh son of Gurmeet Singh, resident of K. No.86, Phase-6, Mohali.
…….Complainant
Versus
Yougal Sons Fashions Pvt. Ltd. Shop No.75, 1st 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 29.08.2017 complainant after visiting outlet of OP, purchased T-shirt having MRP of Rs.960/- inclusive of all taxes. Discount on the product was given and thereafter retail invoice bill for amount of Rs.504/- including Rs.24/- 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 complainant that in case GST not paid, then he will not be allowed to buy the T-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.24/- 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.960/- inclusive of all taxes and after giving discount of 50%, the discounted price was Rs.480/-. It is admitted that CGST and SGST of Rs.24/- 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 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.960/- inclusive of all taxes and the same is also mentioned in copy of the tag Ex.C-1. Admittedly discount @ 50% was offered and the discounted price was Rs.480/-. However, on this discounted price, SGST of amount of Rs.12/- and CGST of amount of Rs.12/- has been charged, is a fact borne from copy of invoice Ex.C-2 dated 29.08.2017. So virtually GST of amount of Rs.24/- 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 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-1 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 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.24/- with interest @ 6% per annum w.e.f. 29.08.2017 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
