Sudarshan Theatre Vs Union of India (Telangana High Court)
The Hon’ble Telangana High Court in Sudarshan Theatre v. Union of India [Writ Petition Nos. 4760 and 5351 of 2021 dated June 21, 2024], dismissed the writ petitions and held that the Assessee violated Section 171 of the Central Goods and Services tax Act, 2017 (“the CGST Act”) by failing to reduce ticket prices immediately following the Goods and Services Tax (“GST”) rate reduction effective from January 1, 2019. Further, a reading of sections 171 & 172 of the CGST Act does not show any exception carved out in the event of non-reduction in the price of tickets, nor is the authority empowered to relax conditions so enumerated under section 171(1) of the CGST Act. The Hon’ble Court found no illegality or exception in the Authority’s order required the re-computation of profiteering.
Facts:
M/s. Sudarshan Theatre (“the Petitioner”), collected GST on cinema tickets at rates 28% and 18% for tickets priced above Rs. 100 and below Rs. 100, until December 31, 2018. Effective January 1, 2019, the GST rates were reduced to 18% and 12% respectively. However, the Petitioner reduced ticket prices only from March 11, 2019, and continued to charge the reduced prices until May 08, 2019, after which they maintained the lower prices. Despite not immediately lowering ticket prices for the first 2 months and 12 days after the tax rate reduction, the Petitioner still paid GST to the Government at the new rates of 18% and 12%.
