Consumers' forum says no VAT can be charged on discounted items
The goods sold by shops at a discounted price on MRP cannot charge Value Added Tax, said the National Consumer Disputes Redressal Commission. The NCDRC said that the MRP already includes all taxes and cess in accordance with Section 2(d) of Consumer Goods Act, reported TOI.
The order came after the NCDRC rejected a plea by Woodland franchises last month after it had denied to refund VAT charged on jackets sold at 40 percent discount, said reports.
NCDRC president Justice D K Jain said that the advertisement of discount was to lure the customers to buy the mechandise and was not intended to be the real bargaining price.
The commission upheld the verdicts of district and state forums and directed the shop owners to refund the extra amount to complainants.
It also ordered the shop owners to pay compensation ranging between Rs 2,000 and Rs 5,000 and the litigation charge borne by the complainants.