NAA finds Maggi noodles distributor guilty of profiteering

The National Anti-profiteering Authority (NAA) under the Goods and Services Tax (GST) has held an Uttar Pradesh-based dealer of Maggi noodles guilty of indulging in profiteering.

The anti-profiteering watchdog has directed the dealer to deposit Rs 90,778 along with an interest of 18% per annum in the Consumer Welfare Fund and refund Rs 2,253 to the complainant.

The complainant, a Maggi retailer, had alleged that despite a reduction in the GST rate from 18% to 12% in November 2017, the base price of a 35gm pack was increased to bring it at par with the price before the change. He, however, said that the benefit which accrued in respect of Rs 5 MRP pack had been passed on by reducing the price of Rs 12 MRP (70gm) pack of Maggi. 

NAA, in its order, said that the benefit of tax reduction had to be passed on for every unit, the dealer could not selectively lower price of one pack size to cover other pack sizes. It further stated that a 35gm pack of Maggi Noodles is distinct from a 70gm pack and both the packs may be bought by the different customers and hence, the benefit accruing to one customer cannot be given or denied to another.

Pratik Jain, partner and leader, indirect tax, PwC India, said, "This is another ruling which mandates that any benefit arising as a result of reduction in GST rate has to be passed on at each stock keeping unit level and the same cannot be passed on at a product or entity level."