Anti-Profiteering —Section 171 of the CGST Act, 2017— The application alleged profiteering in respect of restaurant service supplied by the Respondent (Franchisee of M/s. Subway Systems India Pvt Ltd.). It was alleged that despite the reduction in the rate of CST from 18% to 5% w.e.f. 15.11.2017, the Respondent had not passed on commensurate benefit since he had increased the base prices of his products. The DGAP concluded that the allegation of profiteering by way of either increasing the base prices of the products while maintaining the same selling prices or by way of not reducing the selling prices of the products commensurately, despite the reduction in the rate of GST from 18% to 5% w.e.f. 15.11.2017 stood confirmed and that the extent of profiteering was Rs. 61,67,097/- (inclusive of GST). Thus the provisions of Section 171 (1) of the CGST Act, 2017 had been contravened by the Respondent.
Held that:- The Hon’ble Anti-Profiteering Authority directed to the Respondent to reduce his prices commensurately in terms of Rule 133 (3) (a). Since the Respondent has denied the benefit of tax reduction to the customers in contravention of the provisions of Section 171 (1) and has thus resorted to profiteering. Hence, he has committed an offence under section 171 (3A) and liable to penal action.—Director-General of Anti-Profiteering Vs. Lite Bite Travel Foods Pvt. Ltd.  27 TAXLOK.COM 036 (NAPA)