More Grammage instead of lowering price is ok?
NAA recently found the country’s largest fast-moving consumer goods (FMCG) firm guilty of profiteering Rs 456 crore, but lowered the amount to be recovered to Rs 383 crore on account of benefit of grammage (increase of weight in grams). Does this mean all companies like Patanjali, cadburys, johnson johnson etc will get this benefit?? more
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I'm afraid the double whammy is that most companies in fact increase the price while at the same time reducing the quantity. more
Jan 09
This is the tricks that company plays withthe customer thinking they will not go through the details more
Jan 09
Businesses play all types of tricks. If we go through some of verdicts of NAA (one example, McDonalds), we get to know up to what extent they go to, to defend themselves! Here is another example of a good and neutral assessment. Though the anti-profiteering amount worked out to Rs 456 Crore, NAA had given due credit and adjustment due to extra quantity supplied and reduced the amount to Rs 383 Crore. Views expressed by others are fully appreciated. May be NAA considers issues purely on pre-deduction and post deduction tax rates to decide on anti-profiteering. A right thing to do. Does not look like NAA has objected to increase of quantities supplied but given due credit to extra quantity supplied; nor at any stage, NAA dictated any terms on profit margins. more
Jan 08
In case of reduction in the cost of the production, the company increases the content of the material by retaining the same prices instead of reducing the same prices, I feel it cannot be objected to. I have a second question whether the Govt has any power to look into the profitability of the manufacturer as long as books of accounts are found to be ok and the manufacturer is paying the taxes. As a manufacturer, I have liberty to go to my work place in a small car to save on my expenses or Mercedeze to spent as much as possible for the comfort and as far as I can sell my products. Can the Govt compel me to do so and restrict the profitability of my company. Just want your views. more
Jan 08
Thanks for requesting users views.
Point 1
GST Rules say that whenever a rate reduction is announced, the sellers are supposed to pass on benefits to Buyers. And only method according to GST, as far as I know, is to pass on benefits by the way of proportionate base price cost.
I don't think there is any provision to pass on benefits by increasing quantity supplied. The manufacturer has taken a decision in this regard and assumed that by doing this, they are complying fully with anti-profiteering rules. This may not be true as law does not provide for the same.
Yet this may also be considered by GST Council as an alternative to considering price benefits. Manufacturers may take up the issue with the Council.
Point 2
It is fully agreed that Govt has absolutely no right to look into or dictate/limit profit margins to any manufacturer. Nor how the profit is spent, with thrift or in abundance! Does NAA verdict on case being discussed, mention about profit level or limit the same anywhere? I have not read the verdict in full and if there is a mention on profitability, then u r perfectly right! more
Point 1
GST Rules say that whenever a rate reduction is announced, the sellers are supposed to pass on benefits to Buyers. And only method according to GST, as far as I know, is to pass on benefits by the way of proportionate base price cost.
I don't think there is any provision to pass on benefits by increasing quantity supplied. The manufacturer has taken a decision in this regard and assumed that by doing this, they are complying fully with anti-profiteering rules. This may not be true as law does not provide for the same.
Yet this may also be considered by GST Council as an alternative to considering price benefits. Manufacturers may take up the issue with the Council.
Point 2
It is fully agreed that Govt has absolutely no right to look into or dictate/limit profit margins to any manufacturer. Nor how the profit is spent, with thrift or in abundance! Does NAA verdict on case being discussed, mention about profit level or limit the same anywhere? I have not read the verdict in full and if there is a mention on profitability, then u r perfectly right! more
Jan 09
