Store to pay Rs 4k for charging GST on discounted MRP

Ludhiana: District Consumer Disputes Redressal Forum has imposed a fine of Rs 4,000 on a store for charging GST on a discounted product. The store overcharged a Manimajra resident of Rs 251.56.
Out of the Rs 4,000 fine, the forum asked Carlton Overseas Private Limited, Silver Arc Mall, Ferozepur Road, to pay Rs 2,000 as compensation for mental harassment and additional equal amount as litigation expenses to Rahul Sahdev of Manimajra.

Rahul in his complaint on October 29, 2018, said he had purchased a product from the seller on August 2017 by paying an amount of Rs 1,649. The product’s MRP being inclusive of all taxes was Rs 2,795. After discount of 50% on the MRP of the said product, the discounted price payable was Rs 1,397.50.

However, GST at the rate of 18% was charged due to which Rahul had to pay additional Rs 251.56. As charging GST on discounted price is an unfair trade practice, Rahul filed a complaint seeking refund of the excess amount charged along with compensation on account of mental and physical harassment of Rs 25,000 and litigation expenses of Rs 15,000.

The hearing was proceeded ex-parte. The complainant produced the tag of the product and invoice of the money charged from him to support his complaint.

The forum held that discount on MRP is given under circumstance when MRP is inclusive of all taxes. Act of deliberately charging VAT/GST and other taxes on price after discount is an unfair trade practice. “In view of adoption of this unfair trade practice, the complainant suffered mental harassment and agony. He is entitled to compensation for mental harassment and agony along with litigation expenses,” the forum held.

The forum directed the seller to refund the excess amount of Rs 251.56 with interest of 6% per annum from the date of selling the product till payment.