Patanjali Ayurved distributors have come under the lens of National Anti-profiteering Authority (NAA) for not passing on lower GST rate benefits to customers.
In October 2018, the anti-profiteering authority had asked Patanjali to pay Rs 150 crore penalty for not passing on the lowered GST rates to its customers over the last one year. Investigations in this matter are ongoing.
Apart from Patanjali distributors, the authority is also examining whether prices on consumer goods and pharmaceuticals held by distributors and stockists on June 30, 2017, were reduced after GST was implemented.
Tax experts have pointed out that there’s no prescribed formula to determine whether benefits have been passed on to customers.
Some companies changed product composition to avoid breaching anti-profiteering norms and when details were sought, the companies would say that being two different products,the prices before and after GST were not comparable.
The anti-profiteering authority has asked companies to produce evidence, wherein they have advised their trade partners to pass on the benefit to consumers. However, companies are finding it difficult to ascertain whether distributors have passed on the reduced levies.
