GST: Profiteering Notice to Dominos' Parent Co for Pizza Over Pricing

GST anti-profiteering body has recently issued a notice to Jubilant FoodWorks which holds the master franchise for Dominos Pizza in India. The Directorate General of Safeguards (DGS) has sent the profiteering notice for the allegation that not passing on GST rate cut benefit to its Dominos Pizza customers.

Anti-profiteering authority is a mechanism to examine whether the benefits of implementation of GST such as tax reduction or input tax credits availed by any registered person have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him, this is to ensure that the consumer is protected from arbitrary price increase in the name of GST. Recently, the Government had simplified the application form for the aggrieved consumers.

The standing committee had acknowledged the DGS sought the response on whether the benefit of tax rate cut in last November was passed on to customers, eventually, DGS received complaints regarding over-charging by Dominos Pizza even after GST rate was cut to 5%.

Under GST regime, complaint having the local nature will be sent to the state-level screening committee while those of the national level sent to standing committee. Two customers reported complaints to the standing committee regarding the overpricing of Dominos pizzas event after the rate cut traveled from 18% to 5%.

Prior to last November GST council decided the tax rate as 18 percent for air-conditioned restaurants and 12 percent for non-air-conditioned restaurants. Now it has charged GST at the rate of 5% only for all restaurants, except the ones located within hotels with room tariffs of Rs 7,500 and above.

DGS will investigate the case and hand over the report to Anti-profiteering Authority for further actions, which may include extreme penal proceedings like fine and cancellation of registration.

If anything happened contrary to the complaints then committees would refer the cases for further investigation to DGS.

It was reported that investigation period for the DGS is within three months and may seek an extension of further 3 months from the standing committee.