The National Anti-Profiteering Authority (NAA) directed the Directorate General of Anti-Profiteering to reinvestigate and recompute the quantum of profiteering by duly incorporating sales data by the respondent, Smoky Kitchen Foods OPC.
The complainant, DGAP had alleged that the Respondent, M/s Smoky Kitchen Foods OPC Pvt. Ltd. had increased the base prices of his products and not passed on the benefit of reduction in the GST rate from 18% to 5% with effect from November 15, 2017 vide Notification No. 46/2017 Central Tax (Rate) dated November 14, 2017 by way of commensurate reduction in prices in terms of Section 171 of the CGST Act, 2017.
The DGAP reported that for the calculation of the quantum of profiteering, the average prices of different products supplied by the Respondent during the pre-tax rate reduction period from November 1, 2017 to November 14, 2017, were taken as the base prices and that for calculation of the product-wise (SKU wise) base prices, the salts data pertaining to World Sandwich Day (WSD), was excluded since the transaction prices pertaining to that day were an exception.
The NAA while considering the Reports furnished by the DGAP observed that this case pertains to a franchisee of M/s Subway India Private Limited in Ghaziabad (Uttar Pradesh) who is supplying various food products to his recipients or customers.
The Authority headed by the Chairman B.N. Sharma found that there has been a reduction in the rate of tax from 18% to 5% w.e.f. November 15, .2017 on the restaurant service being supplied by the Respondent, effected vide Notification No. 46/2017-Central Tax (Rate) dated 14.11.2017, with the conditionality of denial of ITC.
The NAA noted that the Respondent was liable to pass on the benefit of tax reduction to his customers in terms of Section 171 (1) of the above Act. It is also apparent that the DGAP has carried out the present investigation and that the investigation has found this case to be one where the provisions of Section 171 of the CGST Act 201 have indeed been contravened.
The NAA observed that the DGAP report while computing the quantum of profiteering, the sales data of the World Sandwich Day (WSD) has been excluded while working out the product-wise base prices for the pre-tax rate reduction period.
Therefore, the NAA directed the DGAP to reinvestigate the case and recompute the quantum of profiteering by duly incorporating the sales data of the World Sandwich Day as in the calculation of the pre-tax rate reduction prices.
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