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Case Law Details

Case Name : Director General of Anti-Profiteering Vs NY Cinema LLP (NAA)
Appeal Number : Case No. 33/2022
Date of Judgement/Order : 06/07/2022
Related Assessment Year :
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Director General of Anti-Profiteering Vs NY Cinema LLP (NAA)

The main issues to be examined was whether the GST rate on Services by way of admission to exhibition of cinematograph films where price of admission ticket was above one hundred rupees were reduced from 28% to 18% and “Services by way of admission to exhibition of cinematograph films where price of admission ticket was one hundred rupees or less” were reduced from 18% to 12% w.e.f. 01 01.2019 and if so, whether the benefit of such reduction in the rate of GST had been passed on by the Respondent to his recipients, in terms of Section 171 of the CGST Act, 2017.

On examining the various submissions placed on record, the Authority needs to determine as to whether there was any reduction in the GST rate and whether the benefit of reduction in the rate of tax was passed on or not to the recipients as provided under Section 171 of the CGST Act, 2017.

The Authority finds that, as per the details and calculations given in Tables ‘A’ & ‘B’ above, the Respondent has profiteered by way of increasing the base prices of the tickets (Services) by not reducing the selling price of the tickets (Services) commensurately, despite the rate reduction in GST rate on “Services by way of admission to exhibition of cinematograph films’ where price of admission ticket was one hundred rupees or above, from 28% to 18% and “Services by way of admission to exhibition of cinematograph films where price of admission ticket was one hundred rupees or less” were reduced from 18% to 12% w.e.f. 01.01.2019. 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% (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 29.02.2020, comes to Rs. 2,66,99,340/,

This Authority based on the facts discussed above has found that the Respondent has resorted to profiteering 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 exhibition of cinematograph films where price of admission ticket is above one hundred rupees” from 28% to 18%” and “Services by way of admission to exhibition of cinematograph films where price of admission ticket was one hundred rupees or less” were reduced from 18% to 12% w.e.f. 01.01.2019 to 29.02.2020. On this account, the Respondent has realized an additional amount to the tune of Rs. 2,66,99.340/-from the recipients which included both the profiteered amount and GST on the said profiteered amount. Thus the profiteering amount is determined as Rs. 2,66,99,340/- as per the provisions of Rule 133 (1) of the CGST Rules, 2017. The Respondent is therefore directed to reduce the prices of his tickets as per the provisions of Rule 133 (3) (a) of the CGST Rules, 2017, keeping in view the reduction in the rate of tax so that the benefit is passed on to the recipients. The Respondent is also directed to deposit the profiteered amount of Rs. 2,66,99,340/- along with the interest to be calculated @ 18% from the date when the above amount was collected by him from the recipients till the above amount is deposited. Since the recipients, in this case, are not identifiable, the Respondent is directed to deposit the amount of profiteering of Rs. 1,33,49,670/- in the Central Consumer Welfare Fund (CWF) and Rs. 88,27,769/- in the Uttar Pradesh State CWF, Rs. 45,21,139/- in the Gujarat State CWF and Rs. 762/- in the Punjab State CWF respectively, as per the provisions of Rule 133 (3) (c) of the CGST Rules. 2017, along with 18% interest. The above amount shall be deposited within a period of 3 months from the date of this Order failing which the same shall be recovered by the Commissioner CGST/SGST as per the provisions of the CGST Act, 2017.

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