The penalty of not passing on GST benefits to the end customers has hit the South Korean company Samsung too. Samsung has been asked to pay up Rs 37.85 lakh by the National Anti-profiteering Authority (NAA). The product involved is televisions.

NAA has said Samsung violated Section 171 (1) of the CGST Act 2017 which mandates that when there is a reduction in the GST rates then the benefit of that reduction has to be passed on through reduction in the price of the product which got the rate reduction.

According to NAA, Samsung increased the prices of the televisions which action is construed as a deliberate attempt to deny passing on the benefit to the customers. The case relates to the period January 2019, when the GST Council announced a reduction in GST on LED/LCD Televisions from 28% to 18%.

Now this order by the NAA dated February 27, 2020 will have to be implemented by the commissioners of CGST/SGST to see that Samsung deposits the amounts in the customer welfare funds of the state/central governments, again, as laid down in the GST Act.

Now, this amount of Rs 37.85 lakh is the precise amount that the NAA has arrived at after examining the records of the company. It does not include any penalty. The NAA has now sent a separate communication to Samsung asking it to explain why a penalty should not be imposed on it for this act on its part in not passing on the tax reduction benefit to the customers.