Case Law Details
Principal Commissioner Vs Sri Laxmi Kala Mandir 70MM Theatre (NAA)
It is clear from the investigation carried out by the DGAP and also letter dated 03.06.2019 to Deputy Commissioner (Anti Evasion), Medchal, Hyderabad that the Respondent has maintained the same prices of all three categories of movie admission tickets which he was charging before the tax reduction and has not reduced them when the GST rate was reduced from 18% to 12% w.e.f. 01.01.2019. The Respondent should have maintained the classwise details of the tickets sold by him as well as the price charged on each class, however, he has not done so, therefore, there is no other alternative available to compute the profiteering except to take into consideration the total taxable of each class and the reduction in the rate of tax as profiteering is apparent from the details of the prices charged by the Respondent post rate reduction.
As the Respondent had not maintained class/category-wise details of his outward taxable supplies of movie admission tickets, therefore, this Authority finds that the methodology i.e. the clump sum’ of all the three categories of admission tickets adopted by the DGAP to arrive at/compute profiteering in the subject case is correct. It is evident to us that the Respondent had not reduced the base prices of the admission tickets in respect of all the three categories and had instead maintained the pre-rate reduction cum tax prices unchanged by appropriately increasing the base prices of all categories of admission tickets immediately after the tax rate had been reduced.
Further, this Authority takes note of the fact that the Respondent has not submitted any argument against the charges framed in the DGAP’s report. Therefore we don’t find any basis to differ from the findings of the DGAP that the Respondent had indeed contravened the provisions of Section 171 of the CGST Act 2017.
Based on the facts discussed above, it has been established that the Respondent has profiteered by way of increasing the base prices of his supplies of the three categories of movie tickets by maintaining the same selling prices of the movie admission tickets despite the reduction in GST rate on “Services by way of admission to exhibition of cinematograph films where price of admission ticket is one hundred rupees or less” from 18% to 12% w.e.f. 01.01.2019 to 30.06.2019. It is also clear to us that the Respondent has not passed on the benefit amounting to Rs. 1,31,754 (inclusive of GST) to his customers/ recipients. Thus the profiteering is determined as Rs. 1,31,754/- as per the provisions of Section 171 read with Rule 133 (1) of the CGST Rules 2017 and accordingly the Respondent is directed to commensurately reduce the prices of the three categories of movie tickets in line with the provisions of Section 171(1) read with Rule 133 (3) (a) of the CGST Rules 2017.
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