Not passing GST benefit to consumers: Abbott gets HC relief after Challenging powers of National Anti-Profiteering Authority

New Delhi: In an interim relief, the Delhi High Court has stayed proceedings against Abbott Healthcare which was found guilty by the National Anti-Profiteering Agency (NAPA) of charging higher Goods and Services Tax (GST) and not passing on the benefit of GST rate reduction to the tune of Rs 96.59 lakh to consumers.

The move comes after the company questioned the constitutional validity of the provisions as well as the National Anti-Profiteering Agency's (NAPA's) powers to extend the probe to its other products.

A probe had been conducted by the National Anti-Profiteering Authority (NAPA) on the company post which it held company guilty of not passing the benefits.

It was found that despite a fall in tax rates from 28% to 18%, the base price of the product of Abbott was increased from Rs 202.06 to Rs 230.90 per unit which resulted in an increase of the selling price and denial of passing the benefit of tax reduction to the customers.

The authority had directed the Mumbai- based company to deposit the amount in the consumer welfare fund along with 18 per cent interest.

Also Read: GUILTY: Abbott Healthcare did not pass Rs 96.59 lakh GST benefit to consumers

Challenging the constitutional validity of the NAPA, Abbott's counsel recently appeared before the High Court bench of Justice S Muralidhar and I S Mehta.

The company has argued that this was way beyond the powers given to the agency under Central GST rules.

Abbott’s counsel Mukul Rohatagi stated that the company had accepted to pay the demand of Rs 96 lakh along with the applicable interest.

However, Abbott has reportedly undertaken the same on condition that no further investigation and penalty by NAPA was conducted.

Besides Abbott, Hindustan Unilever and Jubilant Foodworks, are other companies which have also questioned the constitutional validity, while challenging NAPA's orders.

"The order gives an opportunity to all dealers against whom anti-profiteering proceedings are initiated to consider filing a letter with anti-profiteering authorities, pleading that their proceedings should be stayed, till the time the issue surrounding constitutional validity is settled by courts," Harpreet Singh, partner at consulting firm KPMG told TOI.