The National Anti-profiteering Authority (NAA) has held that the local unit of Johnson & Johnson has profiteered by Rs 230.4 crore by failing to pass on the benefit of goods and service tax cut on some products and ordered the company to deposit the amount in a consumer welfare fund with interest.
The order, signed by NAA chairman B.N. Sharma, gave the US-based company three months to deposit the amount along with 18 per cent interest in the national consumer welfare fund and in similar funds set up at state levels. The company defaults on payment, the money could be recovered by central and state GST officials, as per the order. The company was ‘apparently liable’ for penalty and directed officials to issue a notice on why penalty should not be imposed, also said.
The company are free to raise price depending on the market dynamics after complying with the CGST Act requirement of immediately passing on the benefit to the consumer cuts in goods and service tax (GST).  To maintain the reduce price the law does not specify for lock-in period. Many companies have responded to the tax cut by increasing the quantum of a product sold to avoid practically difficult price to reduction.
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