Skechers to pay Rs 3,000 for charging Rs 314 VAT on discounted shoes

  • Nikhil Sharma, Hindustan Times, Chandigarh
  • Updated: Apr 15, 2016 15:27 IST
The forum stated that no one could charge more than the maximum retail price , as it included all taxes, including VAT. (Getty Images)

Charging value-added tax on a discounted product has cost Skechers Retail India Limited dearly.

The district consumer disputes redressal forum has directed the store manager to pay Rs 3,000 as compensation to the complainant for deficiency in services and causing mental and physical harassment to the complainant.

The store, located in a shopping mall near IT Park, Kishangarh, has also been asked to refund Rs 312  that was wrongly charged as VAT from SAS Nagar resident Shyam Sunder Sharma, and pay Rs 3,000 as litigation cost. 

The forum, in its order, stated that no one could charge more than the maximum retail price (MRP), as “it included all taxes, including VAT, and so other taxes cannot be charged separately”.

Sharma had submitted in his complaint that he had purchased a pair of Skechers shoes having an MRP of Rs 4,999 on July 26, 2015. He claimed that he was offered a discount of 50% on the purchase, and the price tag mentioned that it was inclusive of all taxes. However, he found a charge of Rs 312.44 levied as 12% VAT on the bill.

When he contended the charge was illegal, the store manager refused to pay heed.

In their response, the store officials denied having offered 50% discount to Sharma. Besides, they argued that a retailer was entitled to charge VAT on any sale price as long as it did not exceed the MRP, and thus there was no deficiency in services.

Terming respondent’s response as not tenable, the forum stated the discount so offered was part of their promotional policy. By showing hefty discounts, the store allured gullible customers, who approached them under the misleading belief of getting hefty discounts , only to realise it’s an illusion when they are forced to pay a good amount of illegally imposed VAT.

The forum added, “We are of the opinion that the discount so offered by the respondent is offered from their own margins as per their own choice and are not pressurised to do so and once it is mentioned in the price tag of any item/product as ‘inclusive of all taxes’ then none can add even a single penny on account of any tax. It can only be done in regards to the goods/products where its price does not include all taxes.” 

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