GST: Multiplex operator found guilty of Profiteering, says NAA [Read Order]

Multiplex - NAA - GST - Profiteering - Taxscan

The National Anti-Profiteering Authority ( NAA ) found the Multiplex Operator, M/s Prasad Media Corporation guilty of profiteering for not passing on the GST reduction benefits.

The Applicant has alleged profiteering by the Respondent, M/s Prasad Media Corporation in respect of the supply of Services by way of admission to exhibition of cinematograph films where the price of admission ticket is above Rs.100 despite a reduction in the rate of GST from 28% to 18% w.e.f. January 1, 2019.

The Applicant has alleged that the Respondent increased the base price of his movie tickets and thus maintained unchanged total (cum tax) prices of the movie tickets, charged by him from his customers/ recipients, and had thus not passed on to his customers/ recipients. the benefit of reduction in the GST rate from 28% to 18% effected vide Notification No. 27/2018 Central Tax (Rate) dated December 31, 2018.

The Adjudication Authority headed by the Chairman B.N.Sharma upheld the allegation of profiteering against the Respondent and determined that the Respondent had realized an additional benefit amounting to Rs. 30,13,058 (inclusive of GST).

The NAA directed the Respondent 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 was passed on to the recipients.

The NAA further directed the Respondent to deposit the profiteered amount of Rs.30,13,058 along with the interest to be calculated at the rate of 18% from the date when the above amount was collected by him from the recipients till the above amount was deposited. Since the recipients, in case, were not identifiable, the Respondent had been directed to deposit the amount of profiteering of Rs.15,06,529 along with at the applicable rate in the Telangana State CWF provisions of Rule 133 (3) (c) of the CGST Rules, 2017.

“Accordingly, the Respondent has deposited an amount of Rs. 2,12,788/- in the Central Consumer Welfare Fund and a similar amount of Rs. 2,12,788/- in the Telangana State Consumer Welfare Fund. Further, a has been explained by us in above paras, the Applicant No. 1 is entitled to be passed on an amount of Rs 11.73 along with interest as applicable thereon since the amount has to be passed on equally from the Central CWF and the Telangana State CWF, the amount to be paid from each of the above two CWFs works out to be Rs. 5.865/-, which, on rounding off, has to read as Rs. 6/-. Therefore, we order that an amount of Rupees Six only shall be paid to the Applicant from the Central Consumer Welfare Fund and Rupees Six only from the Telangana State Consumer Welfare Fund along with the interest as applicable thereon,” the NAA said.

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