Outlet fined for charging VAT


Amritsar, September 3

The District Consumer Disputes Redressal Forum has fined a fashion outlet for charging value added tax (VAT) apart from the maximum retail price (MRP) from a customer as the product’s price tag mentioned that the MRP was inclusive of all taxes. The outlet has been asked to refund Rs 39.29 (VAT), Rs 2,500 as compensation and Rs 1,500 as litigation expenses to Ravinder Singh, a resident of Chheharta.

Ravinder had filed a complaint against Aditya Birla Fashion and Retail outlet stating that he had purchased a ready-made shirt for Rs 688.79. Under a sale promotion scheme, opposite party sold garments on 50 per cent discount. Its MRP was Rs 1,299 and the price tag indicated that it was inclusive of all taxes but the opposite party charged 6.05 per cent (Rs 39.29) as VAT, he said.

He said he lodged protest with the management but the latter ignored.

Meanwhile, the opposite party in its reply stated that its advertisement clearly mentioned that the discount of 50 per cent had a condition under which VAT would be charged extra. It stated that the complainant had bought the product at discounted price and as per the rules and provisions of Punjab Value Added Tax Act, 2005, the VAT was charged on the discounted price. It stated that the complainant was well aware of the fact that the VAT would be charged extra after the discounted price as it was displayed in the advertisement.

The forum observed that the opposite party has failed to produce on record any advertisement vide which the VAT worth Rs 39.29 was charged. It stated that the act and conduct of the opposite party proved that it had practised unfair trade practice.


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