Are you also paying VAT on the discounted prices offered by retailers/ brands?

An article titled "Illegal charging of VAT on discounted prices by brands/retailers" was published on 2nd July 2014 in this blog, the link of which is http://skvirmani-jagograhak.blogspot.in/2014/07/illegal-charging-of-vat-on-discounted.html

Now the Hon'able National Commission has adjudicated that the charging of VAT on the discounted prices is unfair business practices and amounts to overcharging. The brief of the judgement is as:

The addition of VAT on discounted price amounts to overcharging and unfair trade practice

National Consumer Dispute Redressal Commission, (NCDRC) New Delhi in Revision Petition No.3156 of 2016 of BENETTON INDIA PRIVATE LIMITED (Petitioner) Vs. RAVINDER SINGH (Respondent/Complainant) upheld the order of the State Commission and District forum directing the BENETTON INDIA PRIVATE LIMITED to pay compensation of Rs.5000/- to the complainant besides Rs.1000/- against cost of litigation.  

The respondent complainant on 11.07.2014 purchased one trouser from the petitioner opposite party vide bill no. 769-3375 dated 11.07.2014. The trouser was offered on 30% discount on MRP, which as per tag was Rs.2299/- inclusive of all taxes. The petitioner after discounting the MRP by 30% of Rs. 2299/- sold the trouser for Rs.1609/-. However, on the aforesaid discounted price, the petitioner charged 6.05% VAT amounting to Rs.97.36/-. According to the complainant, when the trouser was offered on 30% discount on the tag price, which was inclusive of taxes, the addition of VAT on discounted price amounts to overcharging and unfair trade practice. The complainant thus filed consumer complaint in the District Forum, Amritsar.

The petitioner argued the Complaint by filing written statement, while denying the allegation of over charge or unfair trade practice on its part, it was pleaded that subject trouser was offered on 30 % discount subject to payment of VAT etc. Therefore, the allegation made by the complaint that the petitioner had illegally charged VAT is without any basis.

 On the analysis of the pleadings and evidence adduced by the parties, the district forum found force in the claim of the respondent complainant. Consequently, the district forum allowed the complaint and the complaint and directed the petitioner opposite praty to refund a sun of Rs. 97.36 i.e. excess charged from the complaint in the form of VAT. The district forum also directed the opposite party to pay compensation in the form of VAT. The district forum also directed the opposite party to pay compensation of Rs. 5000/- to the complainant besides Rs.1000/- against cost of litigation.

Aggrieved by the order of the District Forum, the petitioner approached the State Commission in appeal. On appreciation of the material placed on record, the State Commission concurred with the finding of the District Forum and dismissed the appeal.

National Commission did not find any jurisdictional error or material irregularity in the impugned order which may call for interference in exercise of revisional jurisdiction. Therefore revision petition is dismissed.