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The Respondent has denied the benefit of rate reduction to his customers/recipients in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and resorted to profiteering and hence, committed an offence under Section 171 (3A) of the CGST Act

Anti-Profiteering — Section 171 of the CGST Act, 2017— The Applicant had filed an application alleging profiteering by the Respondent in respect of the supply of “Services by way of admission to exhibition of cinematograph films where the price of admission ticket was above one hundred rupees” despite the reduction in the rate of GST from 28% to 18% W.e.f. 01.01.2019. The DGAP has reported that the selling price of the Movies Tickets has not been reduced commensurately by the Respondent in the post-rate-reduction period after the GST rate was reduced from to 18% w.e.f 01.01.2019. Hence the Respondent has profiteered for Multi-Screen- 1 to 5 (2D Movies) and for Screen-6 (3D Movies). Thus it was clear that the Respondent has contravened the provisions of Section 171 of the Act by not passing on the commensurate benefit to his recipients/customers.
Held that:- The Hon’ble Anti-Profiteering Authority held that the respondent has resorted to profiteering by way of either increasing the base prices of the service while maintaining the same selling prices or by way of not reducing the selling prices of the service commensurately, despite a reduction in GST rate from 28% to 18%. The Respondent has denied the benefit of rate reduction to his customers/recipients in contravention of the provisions of Section 171 (1) of the Act and resorted to profiteering and hence, committed an offence under Section 171 (3A) of the Act, therefore, liable for the imposition of penalty.—Principal Commissioner, Central Tax & Central Excise Hyderabad, Director-General of Anti-Profiteering, Indirect Taxes Customs. Vs. Prasad Media Corporation Pvt. Ltd. [2020] 26 TAXLOK.COM 011 (NAPA)