Section 171 of CGST Act, 2017 — Anti-profitteering — Supply of SGB Stuffed GB (Garlic Bread)— Medium Veg Pizza— Restaurant service—In the instant case, allegation on respondent is that he had increased the base prices of the above food items and charged the same base prices which he was charging before the rate of tax was reduced and had he maintained the same base prices which he was charging before the tax reduction the consumers would have been benefited but in this case it had not happened. He had therefore alleged that the Respondent had resorted to profiteering and accordingly action should be taken against him.

Held that— It is  clear from the record that the Respondent during the period between 15.11.2017 to 31.05.2018, had increased the base prices by more than 5.59% i.e. by more than what was required to offset the impact of denial of ITC in respect of 170 items, from 5.75% to as high as 84.55%, out of total 393 items sold during the same period and therefore, in respect of these items the commensurate benefit of reduction in the rate of tax from 18% to 5% had not been passed on to the customers by the Respondent.

it is held that the Respondent has not passed on the benefit of reduction in the rate of tax to his recipients, commensurate to the denial of ITC, during the period between 15.11.2017 to 31.05.2018 and accordingly, the quantum of denial of such benefit or the profiteered amount illegally earned by the Respondent is determined as 41,42,97,635/- as per the provisions of Rule 133 (1) of the CGST Rules, 2017. Accordingly, the Respondent is directed to reduce his prices by way of commensurate reduction keeping in view the reduced rate of tax and the benefit of ITC denied. The Respondent is also directed to refund to the Applicant No. 1 an amount of 5.65 along with interest @18% from the date of charging of the above amount from him till its refund. He is further directed to deposit the balance amount of 41,42,97,629.35 (Rupees Forty One Crore Forty Two Lakh Ninety Seven Thousand Six Hundred Twenty Nine and Thirty Five Paise only) as per the provisions of Rule 133 (3) (c) in the ratio of 50:50 in the Central and the State CWFs along with interest @ 18% till the same is deposited, within a period of 3 months.

As per the above narration of the facts it is clear that the Respondent has resorted to profiteering by charging more price than what he could have charged by issuing wrong tax invoices. He has further acted in conscious disregard of the obligation which was cast upon him by the law, by issuing incorrect invoices in which the base prices were deliberately enhanced more than what he was entitled to increase due to denial of ITC and thus he had denied the benefit of reduction in the rate of tax granted vide Notification dated 14.11.2017 to his customers. Accordingly he has committed an offence under Section 122 (1) (i) of the CGST Act, 2017. — Kiran Chimirala, Director General Anti-Profiteering, Central Board of Indirect Taxes And Customs Vs. Jubilant Foods Works Ltd. [2019] 8 TAXLOK.COM 051 (NAPA)