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It is clear that the Respondent has not contravened the provisions of Section 171 of the CGST Act, 2017 and hence there is no merit in the application filed by the Applicant No. 1 and the same is accordingly dismissed.

Shanti Prime Publication Pvt. Ltd.

Section 171 of CGST Act, 2017— Anti-Profiteering —benefit of reduction in the rate of GST in restaurant service—In the instant case, the application has been filed by applicant alleging that the Respondent has not passed on the benefit of reduction in the rate of GST in restaurant service, when he had purchased “6 Hara Bhara Kabab Sub.
It was also alleged that the Respondent had increased the base price of the product from 130/- to 145/- when the GST was reduced from 18% to 5%. Thus it was further alleged that the Respondent had indulged in profiteering in contravention of the provisions of Section 171 of CGST Act, 2017.

The question before authority is that—
Whether there was reduction in the rate of tax on the restaurant service after 14.11.2017 and whether the benefit as emanating from such reduced tax rate has not been passed to the Applicant in terms of the commensurate reduction in the price of the product purchased by him?
Whether profiteering of 452/- was made by the Respondent by selling 32 number of items on 14.11.2017 in Karelibaug outlet at increased base price?

Held that—It is apparent from the facts of the case that the Respondent had increased the base price of his products to make good the loss which had occurred due to denial of ITC post GST rate reduction. It is further revealed that the Respondent had increased the average base price by 12.14% to neutralize the denial of ITC of 11.80% and such increase is commensurate with the increase in the cost of the product on account of denial of ITC. Therefore, the allegation of not passing on the benefit of rate reduction is not established against the Respondent.
As far as the issue of profiteering of  452/- made on the supply of the products on 14.1 1.2017 is concerned the same cannot be termed as profiteering in terms of section 171 of CGST Act, 2017 as there was no rate reduction on 14.11.2017 as the same had occurred w.e.f. 15.11.2017 only.
Thus, the Respondent has not contravened the provisions of Section 171 of the CGST Act, 2017 and hence there is no merit in the application filed by the Applicant - application dismissed. [Jijrushu N. Bhattacharya vs. NP Foods (Franchisee M/S Subway India) ] [2018] 4 TAXLOK.COM 052 (NAPA)