The complaint has been filed alleging profiteering in respect of taurant service supplied by the Respondent, Franchisee of M/s Subway Systems India Pvt. Ltd. In the application, it was alleged that despite the reduction in the rate of GST from 18% to 5% with effect from November 15, 2017, the Respondent had not passed on the commensurate benefit of tax reduction as he had increased the base prices of his products.
The Respondent has contended that the ratio of ITC to the turnover during the pre rate reduction period has been calculated by the DGAP considering the period from July 2017 to October 2017.
As per CBIC Press Release No. 62/2018, dated October 18, 2018, the last date to avail ITC in respect of invoices or debit notes relating to such invoices pertaining to the period from July 2017 to March 2018 was extended up to 31 December 2018. Therefore, the credit availed only during the period July 2017 to October 2017 considered for determination of ITC ratio was not proper.
The NAA headed by the Chairman, B.N. Sharma observed that in the interest of natural justice and keeping in view that the Covid-19 pandemic could have prevented the Respondent from making his submissions in a timely manner.
Therefore, the NAA held that the matter needs to be reinvestigated by the DGAP under Rule 133(4) of the CGST Rules, 2017. On his part, the Respondent is directed to fully cooperate with the DGAP in the process of reinvestigation which includes submission of the requisite invoices/ debit notes pertaining to his supplies during the period July 2017 to October 2017, the ITC of which might have been claimed later till December 31, 2018.Subscribe Taxscan AdFree to view the Judgment