Charging Rs 24.98 GST on discounted price costs clothing store dear

Ludhiana: The District Consumer Disputes Redressal Forum has imposed a fine of Rs 4,000 on a clothing store for overcharging Rs 24.98 from a Chandigarh resident. Moroever, Aeropostale Chawla Fashion Shop has been directed to pay Rs 2,000 as compensation for mental harassment and agony along with litigation expenses to the complainant, Parveen Dangwal of Sector 7-B in Chandigarh.
Dangwal stated in his complaint of October 29, 2018 that he had purchased a product from the seller on July 28 2017 by paying an amount of Rs 524. The maximum retail price (MRP) of the product, inclusive of all taxes, was Rs 999. After a discount of 50% on the MRP of the said product, the discounted price payable was Rs 499.50, but GST at the rate of 5% of Rs 24.98 (CGST 2.5% amounting to Rs.12.49 and SGST 2.5% amounting to Rs.12.49) was charged from him.

Following this, the Dangwal filed for a refund of excess GST of Rs 24.98 along with compensation on account of mental and physical harassment of Rs 25,000 and litigation expenses of Rs 15,000. The complainant had produced the tag of the product and invoice of the money charged from him to support his complaint.

The forum observed that in view of the law laid down in the cited cases as, discount on the MRP is given under the circumstance that MRP is inclusive of all taxes, so the act of deliberately charging VAT/GST and other taxes on the discounted total falls under unfair trade practice. In the current case, it is obvious that the store adopted unfair trade practice by charging extra GST of Rs 24.98 on the discounted price of the product purchased by the complainant.

“In view of adoption of this unfair practice, the complainant suffered somewhat mental harassment and agony and as such, he is entitled to compensation for the same along with litigation expenses,” the forum observed.

Apart from directing the seller to refund the excess amount of Rs 24.98 with interest of 6% per annum from the date of selling the product till payment, the consumer forum also asked the store to pay Rs 2,000 compensation for mental harassment and litigation charges to the complainant.