The National Anti-Profiteering Authority (NAA) found Inox Leisure guilty of not passing Goods and Service Tax (GST) rate cut to consumers.
The Applicant filed the complaint against the respondent, M/s Inox Leisure Pvt. Ltd. alleging profiteering in respect of the supply of restaurant service despite a reduction in the rate of GST from 18% to 5% with effect from November 15, 2017 and also increased the base prices of his items.
The Respondent has contended that the incorrect addition of 5% GST to the alleged profiteering amount has been done.
However, the NAA while rejecting the contention of the applicant noted that the provisions of Section 171 (1) and (2) of the CGST Act, 2017 require that the benefit of reduction in the tax rate is to be passed on to the recipients/ customers by way of commensurate reduction in price, which includes both the base price and the tax.
The Authority headed by Dr. B.N. Sharma while holding the respondent guilty of profiteering directed the Respondent to reduce his prices commensurately in terms of Rule 133 (3) (a) of the above Rules.
The NAA further said that since the recipients of the benefit, as determined above are not identifiable, the Respondent is directed to deposit an amount of Rs. 3,10,56,939 in two equal parts of Rs. 1,55,28,470 each in the Central Consumer Welfare Fund and the State Consumer Welfare Funds along with 18% interest within a period of 3 months from the date of passing of this order failing which it shall be recovered by the concerned CGST/SGST Commissioner. However, the Authority did not impose the penalty as no penalty provisions were in existence when the Respondent had violated the provisions of Section 171 (1), the penalty prescribed under Section 171 (3A) cannot be imposed on the Respondent retrospectively.
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