Skip to content

CMA Final · Indirect Tax Laws and Practice · Anti-profiteering

The Authority concludes that Sundaram Foods Ltd profiteered Rs 6,50,000 by not passing on a tax rate reduction. The company does not deposit the amount within thirty days of the order. What is the penalty leviable under the Act?

The penalty is Rs 65,000, being ten per cent of the profiteered amount of Rs 6,50,000. Since the company did not deposit the profiteered amount within thirty days of the order, the proviso granting relief does not apply and the full ten per cent penalty is leviable.

  1. ARs 65,000Correct
  2. BRs 6,50,000
  3. CRs 32,500
  4. DNil, because penalty applies only on a second default

Explanation

Penalty is ten per cent of the amount profiteered. 10% of 6,50,000 is Rs 65,000. The proviso for nil penalty applies only if deposit is made within thirty days, which was not done. Rs 32,500 wrongly uses five per cent.

Did you get it right without looking?

One question tells you little. A timed set on Anti-profiteering shows your real accuracy, how long you take and where you lose marks.

Practise Anti-profiteeringFree diagnostic mock

More Anti-profiteering questions