DGAP Vs Bhavya Construction Pvt Ltd. (GSTAT)
The proceedings arose from a report submitted by the Director General of Anti-Profiteering to examine whether the respondent had violated Section 171 of the Central Goods and Services Tax Act, 2017 by failing to pass on the benefit of reduction in GST rates on cinema admission tickets. With effect from 01.01.2019, GST on tickets priced at ₹101 or more was reduced from 28% to 18%, and on tickets priced at ₹100 or less from 18% to 12%. The DGAP alleged that despite this reduction, the respondent did not reduce ticket prices and instead increased base prices, resulting in profiteering of ₹11,88,482 for the period from 01.01.2019 to 30.06.2019.
An application alleging profiteering was received by the Standing Committee on Anti-Profiteering on 29.03.2019 and referred to the DGAP for investigation. The DGAP’s report dated 18.12.2019 found that the respondent continued charging the same gross ticket prices of ₹100, ₹70, and ₹30 before and after the GST rate reduction, while increasing base prices post-reduction. The DGAP examined ticket categories such as Maharaja Circle, Dress Circle, and First Class, and concluded that the benefit of GST reduction was retained by the respondent. Detailed computations were provided in Tables A and B of the report, quantifying excess base price, excess tax, and total profiteering per ticket, culminating in a total profiteered amount of ₹11,88,482.
