GST body holds Johnson & Johnson guilty for profiteering

Johnson & Johnson Pvt Ltd (J&J) was held by The National Anti-Profiteering Authority (NAA) for profiteered from depletion in costs under the goods and services tax (GST), not giving the advantage of lesser rates to the customers. The profiteered amount stood at Rs230 crore, according to an order dated 23 December 2019.

The Director General of Anti-Profiteering had reported an application against J&J in the issue.

“It is evident from the facts that the respondent (J&J) has denied the benefit of tax reduction to the customers in contravention of the provisions of section 171(1) of the CGST (Central GST) Act, 2017, and has thus, profiteered as per the explanation attached to the section 171 of the above Act,” the order said.

“Therefore, he (J&J) is liable for the imposition of penalty under section 171(3A) of the CGST Act,” it added.

The authority, in its order, asked J&J to lower costs of its products and directed the company to give Rs230 crore in consumer welfare funds (CWFs) of the central and state governments.

“…18% interest payable from the dates from which the above amount was realised by the respondent (J&J) from his recipients till the date of its deposits,” the authority said in its order.

J&J will have to submit Rs230 crore to CWFs of the centre and state governments in the time course of three months from the date of passage of the order. And if the company fails to do so, commissioners under the central GST and state GST will recover the amount, said NAA, the quasi-judicial authority of the GST structure.

Himachal Pradesh, Punjab, Uttarakhand, Haryana, Delhi, Rajasthan, Uttar Pradesh, Assam, Bihar, West Bengal, Jharkhand, Odisha will receive deposits above Rs1 crore in their state CWFs.


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