GST: Anti-profiteering Charges against Mahesh Babu’s Multiplex

GST - Mahesh Babu

The Goods and Services Tax ( GST ) department has proceeded against Mahesh Babu’s multiplex in Hyderabad for not complying with the revised GST rates. The department is currently initiating stringent actions against such multiplexes in the city not decreasing the price of movie tickets.

The Rangareddy GST Commissionerate has now detected a case of undue and illegal profiteering on AMB cinemas, a joint venture between Asian Group and Tollywood star Mahesh Babu.

The seven-screen ‘superplex’, operating from Sarath City Capital mall on the Gachibowli-Miyapur road, has come under the scanner for profiteering illegally to the tune of `35 lakh by not transferring the benefit of reduced GST rates onto the consumers, as mandated in a notification that came into effect on January 1, 2019.

The anti-evasion team of Rangareddy GST Commissionerate has examined the alleged case of undue profiteering and sources say, the details have been forwarded to the state screening committee for further action.

According to officials, “The owners of AMB Cinemas have not brought down entry ticket price despite GST rate reduction from 28 percent to 18 percent on Rs 100 and above tickets and 18 percent to 12 percent on below Rs 100 ticket, with effect from January 1, 2019. Hence, the undue profit accrued to him by pocketing a differential amount of unchanged ticket price and now brought down the price of the ticket had to be paid back to the consumer welfare fund, forthwith.” Under Section 171 of CGST Act, the reduced benefit on tax should be passed on to the consumers. “Else penal action will be initiated,” said an official.

 “Yes, the assessee has reduced the rates but not on the date of notification reducing GST rates. That is why the element of profit will arise,” said GST sources.

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