GST Rate Deduction benefit in Movie Tickets does not pass to the Consumers: NAA finds Multiplex guilty of Anti-Profiteering

The National Anti-profiteering Authority (NAA), has found M/s Piccadilly Square Movie Complex guilty of anti-profiteering since the GST rate deduction benefit in movie tickets were not passed to the customers.

An application was filed against the respondent, M/s Piccadilly Square Movie Complex alleging that the respondent has profiteered with respect to supply of ‘Services by way of admission to exhibition of cinematography films’. The Applicant has contended that the respondent did not pass on the benefit of reduction in the GST rate on the aforesaid movie admission tickets, from 28% to 18% w.e.f 01.01.2019 and instead increased the base price to maintain the same cum-tax selling price. DGAP has in its report concluded that the base price of the admission tickets were increased as a result of which the benefit of reduction in GST rate from 28% to 18% and 18% to 12% (w.e.f 01.01.2019) was not passed on to the recipients by way of commensurate reduction in prices charged.

A coraam of Amand Shah, (Chairman & Technical Member), Pramod Kumar Singh, (Technical Member) and Hitesh Shah, (Technical Member) has held that the respondent did not commensurately reduce the price of the tickets despite reduction in the GST rate from 28% to 18% and from 18% to 12% respectively and thus contravened the provisions of s.171(1) of the Act.

“Respondent has not opposed the said fact of not reducing the prices in commensurate manner after reduction of tax rate and profiteering calculation and has agreed to deposit the profiteered amount – Authority, therefore, finds that the respondent has contravened the provisions of s.171 of the Act, 2017 and the Authority agrees with the profiteering amount calculated by the DGAP,” the authority said. Noting thet there are no specific provisions in the Act or Rules which provide for payment of determined profiteered amount in instalments, the Authority directed the respondents to deposit an amount of Rs.12,06,750/- in the Consumer Welfare Fund of the Central and the State government in the ratio of 50:50 as per the provisions of rule 133(3)(c) of the Rules along with interest @18%.

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