DG Anti Profiteering Vs Vishwanath Cinema Hall 70MM (GSTAT)
The case concerned allegations of profiteering against a cinema theatre operator under Section 171 of the CGST Act, 2017, for failing to pass on the benefit of GST rate reductions on cinema tickets to consumers. The complaint alleged that despite the reduction in GST rates on admission tickets for cinematography films with effect from 1 January 2019, the Respondent maintained the same ticket prices by increasing the base prices, thereby denying consumers the intended tax benefit.
The Director General of Anti-Profiteering (DGAP) investigated the matter and found that the Respondent sold tickets in various categories, including tickets priced at ₹100, ₹60, ₹30, ₹80, ₹40, ₹112, and ₹125. According to the DGAP, although GST rates were reduced, the Respondent retained the same cum-tax ticket prices and increased the underlying base prices. Initially, the DGAP quantified profiteering at ₹6,00,934 for the period from 1 January 2019 to 30 June 2019.
Subsequently, the Competition Commission of India directed a re-investigation, noting discrepancies relating to GST payments, differences in turnover figures, and the need to determine profiteering up to the date of actual price reduction. During the supplementary investigation, the DGAP identified instances of short payment of GST for tickets priced above ₹100 and recalculated the profiteering amount. It concluded that profiteering relating to tickets above ₹100 amounted to ₹3,04,225, while profiteering concerning tickets priced at ₹100 or below amounted to ₹5,95,048. The total profiteered amount was ultimately quantified at ₹8,99,273 for the period from 1 January 2019 to 30 June 2019. The DGAP also reconciled discrepancies in turnover figures after identifying formula errors and excluding non-ticket revenues.
