Case Law Details
Santosh Vs Miraj Entertainment Limited (NAA)
The rates of GST on Services by way of admission to exhibition of cinematograph films where the price of admission ticket was above one hundred rupee was reduced from 28% to 18% and Services by way of admission to exhibition of cinematograph films where the price of admission ticket was one hundred rupees or less was reduced from 18% to 12% w.e.f. 01.01.2019, vide Notification No. 27/2018- Central Tax (Rate) dated 31.12.2018. The benefit of reduction in GST rates was required to be passed on to the recipients by the Respondent as per the provisions of Section 171 of the above Act.
From the facts, it emerges that there is no dispute relating to the fact that the Respondent has increased the base prices of the admission tickets in respect of the regular category and continues to charge the cine-goers at the prevailing rates despite a reduction in the GST w.e.f. 1.1.2019 vide Notification No. 27/2018- Central Tax (Rate) dated 31.12.2018. The Respondent in the written submissions as well as during the personal hearing has admitted the above-said liability of excess collection during the period 1.1.2019 to 30.4.2020.
Authority finds that the Respondent has been profiteering by way of increasing the base prices of the tickets (Services) by not reducing the selling price of the tickets (Services) commensurately in the regular category, despite the rate reduction in GST rate on “Services by way of admission to exhibition of cinematograph fi/ms”where the price of admission ticket was one hundred rupees or above, from 28% to 18% w.e.f. 01.01.2019. From the Table ‘B’ above, it is evident that the base prices of the admission tickets were indeed increased, as a result of which the benefit of reduction in GST rate from 28% to 18% and 18% to 12% (w.e.f. 01.01.2019), was not passed on to the recipients by way of commensurate reduction in prices charged (including lower GST @ 18%). The total amount of profiteering covering the period of 01.01.2019 to 30.04.2020 for the ‘Regular Category’ was 12,83,999/-.
This Authority based on the facts discussed above has found that the Respondent has clearly resorted to profiteering in respect of ‘Regular Category’ by way of either increasing the base prices of the service while maintaining the same selling prices or by way of not reducing the selling prices of the service commensurately, despite a reduction in GST rate on “Services by way of admission to an exhibition of cinematograph films where the price of admission ticket is above one hundred rupees” from 28% to 18%” w.e.f. 01.01.2019 to 30.04.2020. On this account, the Respondent has realized an additional amount to the tune of Rs. 12,83,999/-from the recipients of ‘Regular Category’ which included both the profiteered amount and GST on the said profiteered amount. Thus the profiteering amount is determined as Rs. 12,83,999/-as per the provisions of Rule 133 (1) of the CGST Rules, 2017 in respect of ‘Regular Category’ only.
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