DG Anti Profiteering Vs Vimal 70MM (GSTAT)
The proceedings arose from a complaint filed on 30.04.2019 alleging that M/s Vimal 70MM Theatre had failed to pass on the benefit of reduction in GST on cinema admission tickets priced at Rs. 100 or less. The GST rate was reduced from 18% to 12% with effect from 01.01.2019 through Notification No. 27/2018-Central Tax (Rate) dated 31.12.2018. The allegation was that, instead of reducing the cum-tax ticket prices, the Respondent increased the base prices and continued charging Rs. 100, Rs. 60 and Rs. 30 for Balcony, Second Class and Third Class tickets respectively.
The Standing Committee on Anti-Profiteering referred the matter to the DGAP, which investigated the period from 01.01.2019 to 31.07.2019 and submitted its report dated 31.01.2020. The DGAP determined that the pre-rate-reduction base prices were Rs. 84.74, Rs. 50.84 and Rs. 25.42 respectively, whereas the Respondent charged post-reduction base prices of Rs. 89.28, Rs. 53.57 and Rs. 26.78. The corresponding commensurate prices inclusive of GST at 12% were calculated at Rs. 94.91, Rs. 56.94 and Rs. 28.47. The DGAP quantified profiteering at Rs. 4,72,038.
The Respondent contended that the ticket rates were governed by directions of the Hon’ble High Court of Telangana and that it had been permitted to collect proposed fares subject to informing the authorities and paying proportionate taxes. It relied upon orders dated 31.10.2016, 12.06.2019 and 02.08.2019 and submitted that the ticket prices had been fixed or intimated pursuant to that regulatory framework. The Respondent therefore denied contravention of Section 171 of the CGST Act, 2017.
