Even as over two years have passed since the roll out of the goods and services tax (GST) regime, profiteering continues to take centre stage. Recently, the National Anti-Profiteering Authority (NAA) penalised electronics major Samsung India and asked it to pay over Rs 37 lakh on profiteering charges.

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The NAA order copy -- dated February 27, 2020 -- accessed by CNBCTV18 said that Samsung India had not passed on the benefits of reduced GST rates on LED TVs and power banks to consumers.

Samsung India was ordered to pay Rs 37,85,342, which will have to be deposited with the Consumer Welfare Fund of India.

The GST Council had reduced tax rates on both LED TVs and power banks from 28 percent to 18 percent, with effect from 1st January 2019. Investigations carried out by NAA found that the benefits were not passed on to consumers.

The NAA acted on a complaint filed by one Rahul Sharma through Local Circles. The complaint had alleged that Samsung India did not reduce the selling price of the Samsung 80 CM (32 inch) HD ready LED TV 32FH4003, despite the reduction in GST rate.

The complaint was investigated by a committee and then by the Director General of Anti-Profiteering (DGAP). Following this, a detailed report was sent to the NAA.

The investigations revealed that Samsung India had profiteered on TVs and power banks.

Experts suggest that the Samsung India case is just one example and many more such incidents will come to fore. “All manufacturers must ensure that they lower MRPs when GST rates are lowered by the government.

“This is where action has been missing by most manufacturers and we hope Samsung and all major players in the industry address this issue”, he added.

In the past, many companies have challenged NAA orders in higher courts, it remains to be seen if Samsung India will pay the fine or challenge the order.

First Published:Mar 2, 2020 5:21 PM IST