No Penalty can be imposed on PVR retrospectively for denying GST rate reduction: NAA [Read Order]

NAA - ITC - PVR - GST - Taxscan

The National Anti-Profiteering Authority (NAA) found M/s PVR Ltd. guilty of profiteering but did not impose the penalty for denying the benefit of Input Tax Credit (ITC) to ticket Buyers as no penalty provisions existed when the ITC was denied.

The Applicant, Srinivas, alleged profiteering against the respondent, M/s PVR Limited and submitted that the respondent had not passed on the benefit of reduction in the GST rate from 28% to 18%, the respondent sold tickets of the value of Rs. 250, Rs. 200, 150 at the same price prior to and after the GST rate reduction.

The DGAP stated that the Central Government, on the recommendation of the GST Council, had reduced the GST rate on “Services by way of admission to an exhibition of cinematograph films where the price of admission ticket was above one hundred rupees” from 28% to 18% and “Services by way of admission to an exhibition of cinematograph films where the price of admission ticket was one hundred rupees or less” from 18% to 12% w.e.f. 01.01.2019, vide Notification No. 27/2018- Central Tax (Rate) dated 31.12.2018.

The Authority headed by the Chairman Dr. B.N. Sharma held that the Respondent has contravened the provisions of Section 171 (1) of the CGST Act, 2017. However, since, the penalty prescribed under Section 171 (3A) of the CGST Act, 2017 for violation of the above provisions has come into force w.e.f. 01.01.2020 and the infringement pertains to the period from 01.01.2019 to 06.01.2019 and the Respondent has also deposited the profiteered amount along with the interest therefore, no penalty is proposed to be imposed on the Respondent.

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