Shri. I.P Saji Vs Inox Leisure Pvt. Ltd. (NAA)
The brief facts of the case are that a reference was received from the Standing Committee on Anti-profiteering from Applicant No. 1, alleging profiteering in respect of the supply of restaurant service despite a reduction in the rate of GST from 18% to 5% w.e.f. 15.11.2017. Vide his Application, the above Applicant had alleged that the Respondent had increased the base prices of his items and did not pass on the benefit of reduction in the GST rate from 18% to 5% w.e.f. 15.11.2017, vide Notification No. 46/2017-Central Tax (Rate) dated 14.11.2017 by way of commensurate reduction in prices, in terms of Section 171 of the CGST Act, 2017.
The Respondent had contended that the proceedings/Notice be kept in abeyance pending finality of the various writ petitions which have been filed challenging the orders passed by this Authority. These included WP (C) 378 of 2019 (Hindustan Unilever Ltd. v. Union of India),WP (C) 2347 of 2019 (Jubilant Food works Ltd. v. Union of India), and WP (C) 4213/2019 (Abbott Healthcare v. Union of India). In this context, it would be relevant to mention that the Hon’ble High Court of Delhi has not directed this Authority to stop the proceedings in respect of the present case. Therefore, the present proceedings cannot be kept pending as they are to be completed within the prescribed period. Therefore, the above contention raised by the Respondent is not sustainable.
Based on the facts and discussion the profiteered amount is determined as Rs. 3,10,56,9391- as has been revised vide the DGAP’s Supplementary Report dated 08.10.2020. Accordingly, the Respondent is directed to reduce his prices commensurately in terms of Rule 133 (3) (a) of the above Rules. Further, since the recipients of the benefit, as determined above are not identifiable, the Respondent is directed to deposit an amount of Rs. 3,10,56,939/- in two equal parts of Rs. 1,55,28,470/- each in the Central Consumer Welfare Fund and the State Consumer Welfare Funds as mentioned in the Table ‘F’ Revised, as per the provisions of Rule 133 (3) (c) of the CGST Rules 2017, along with interest payable @ 18% to be calculated from the dates on which the above amount was realized by the Respondent from his recipients till the date of its deposit. The above amount of Rs. 3,10,56,939/- shall be deposited, as specified above, within a period of 3 months from the date of passing of this order failing which it shall be recovered by the concerned CGST/SGST Commissioner.
FULL TEXT OF ORDER OF NATIONAL ANTI-PROFITEERING AUTHORITY
1. The present Report dated 31.01.2020 has been received from the Director-General of Anti-Profiteering (DGAP) after a detailed investigation conducted under Rule 129 of the Central Goods & Service Tax (CGST) Rules, 2017. The brief facts of the case are that a reference was received from the Standing Committee on Anti-profiteering from Applicant No. 1, alleging profiteering in respect of the supply of restaurant service despite a reduction in the rate of GST from 18% to 5% w.e.f. 15.11.2017. Vide his Application, the above Applicant had alleged that the Respondent had increased the base prices of his items and did not pass on the benefit of reduction in the GST rate from 18% to 5% w.e.f. 15.11.2017, vide Notification No. 46/2017-Central Tax (Rate) dated 14.11.2017 by way of commensurate reduction in prices, in terms of Section 171 of the CGST Act, 2017.
2. The DGAP has reported that on receipt of the aforesaid reference from the Standing Committee on Anti-profiteering on 02.05.2019, a Notice under Rule 129 of the Rules was issued by the DGAP on 13.05.2019, calling upon the Respondent to reply as to whether he admitted that the benefit of reduction in GST rate w.e.f. 15.11.2017 had not been passed on to his recipients by way of a commensurate reduction in prices and if so, to suo moto determine the quantum thereof and indicate the same in his reply to the Notice as well as to furnish all documents in support of his reply. Further, the Respondent was afforded an opportunity to inspect the non-confidential evidence/information which formed the basis of the said Notice, during the period 21.05.2019 to 23.05.2019. The Authorized Representative of the Respondent availed of the said opportunity on 22.05.2019.
3. The DGAP had further reported that the period covered in the current investigation was from 15.11.2017 to 30.04.2019 and the time limit to complete the investigation was extended up to 01.02.2020 by the National Anti-profiteering Authority, in terms of Rule 129(6).
4. The DGAP had further reported that in response to his Notice dated 13.05.2019 and subsequent letters and summons the Respondent submitted his responses before the DGAP vide his e-mails/letters dated 22.05.2019, 03.06.2019, 12.06.2019, 18.06.2019, 09.07.2019, 22.07.2019, 14.08.2019, 26.08.2019, 29.08.2019, 03.09.2019, 23.09.2019, 30.09.2019 and 13.01.2020. Vide his various replies, the Respondent made the following contentions before the DGAP:-
a. That he was engaged in the business of Film exhibition service (box office collection), Food and Beverage and advertisement services, etc. Further, it was submitted that the present inquiry was concern’ the supply of food and beverages by him wherein the price was dependent upon and/or significant changes based on the following parameters:
