TaxTMI 
TaxTMI 
2020 (9) TMI 498
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.... to 12% w.e.f. 01.01.2019. 2. Vide his Report, the DGAP has reported that Applicant No. 1 had alleged that the Respondent had not passed on the benefit of reduction in the GST rate on "Services by way of admission to exhibition of cinematograph films" from 28% to 12% which came into effect on 01.01.2019 vide Notification No. 27/2018-central Tax (Rate) dated 31.12.2018. Along with the Application form APAF-1, Letter dated 26.03.2019 of the Respondent requesting for information regarding reduction of movie tickets prices and letter dated 29.03.2019 of the Applicant No. 1 to the Standing Committee on Anti-profiteering. 3. The DGAP has stated that on receipt of the aforesaid reference from the Standing Committee on Anti-profiteering, a notice under Rule 129 of the Rules was issued on 08.07.2019 calling upon the Respondent to respond as to whether he admitted that he had not passed on the benefit of reduction in GST rate w.e.f. 01.01.2019 to his recipients by way of commensurate reduction in prices and, if so, to suo moto determine the quantum thereof and indicate the same in his reply to the notice as well as to furnish all documents in support of his reply. The Respondent was al....
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.... (c) Sample copies of the invoices/tickets, pre and post 01.01.2019. 8. The DGAP has reported that vide e-mail dated 13.02.2020, the Applicant No. 1 was allowed to inspect the non-confidential documents/reply of the Respondent on 17.02.2020 to 18.02.2020, which was not availed of by the Applicant No. 1. The DGAP has further reported that the period covered by the current investigation was from 01.01.2019 to 30.06.2019. 9. The DGAP also reported that he has examined the reference from the Standing Committee on Anti-profiteering and the documents/evidence on record. The main issues to be examined in the present matter were whether the GST rate on "Services by way of admission to exhibition of cinematography films where price of admission ticket is above one hundred rupees" was reduced from 28% to 18% w.e.f. 01.01.2019 and "Services by way of admission exhibition of cinematograph films where the price of the admission ticket is one hundred rupees or less" was reduced from 18% to 12% w.e.f. 01.01.2019 and if so, whether the benefit of such reduction in the rate of GST had been passed on by the Respondent to his recipients, in terms of Section 171 of the CGST Act, 2017. ....
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....ent, it was observed from the details of the sales made available that the Respondent had increased the base prices of the admission ticket when the GST rate was reduced from 18% to 12% w.e.f. 01.01.2019. The same has been illustrated by the DGAP in the below Table-A:- Table-A (Amount in Rs.) Sr. No. Category of Admission ticket 01.12.2018 to 31.12.2018 01.01.2019 to 30.06.2019 The amount charged i.e inclusive of tax (in Rs.) GST Rate (%) Price of Ticket i.e. Base Price (in Rs.) The amount charged i.e inclusive of tax (in Rs.) GST Rate (%) Price of Ticket i.e. Base Price (in Rs.) Commensurate Base Price (in Rs.) The amount which was to be Charged (in Rs.) A B C D E=[C/118%] F G H I J=(I*112%) 1 Emerald Circle 100 18 84.75 100 12% 89.29 84.75 94.92 2 Dress Circle 70 18 59.32 70 12% 62.50 59.32 66.44 3 Emerald 30 18 25.42 30 12% 26.79 25.42 28.47 15. The DGAP has reported that from the above Table it was evident that the Respondent had increased the base prices in all three categories of admission tickets. However, the Re....
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....*G) 1 Emerald Circle 89.29 84.75 4.54 0.54 5.08 72546 3,68,534 2 Dress Circle 62.50 59.32 3.18 0.38 3.56 45812 1,63,091 3 Emerald 26.79 25.42 1.37 0.16 1.53 0 0 Grand Total 5,31,625/- 17. The DGAP has finally reported that the allegation of profiteering by way of increasing the base prices of the tickets (Services) and by not reducing the selling prices of the tickets (Services) commensurately, despite the rate reduction in GST rate on "Services by way of admission to exhibition of cinematography films" where price of admission ticket was one hundred rupees or less" from 18% to 12% w.e.f. 01.01.2019, appeared to be correct. From the table above, it was quite clear that the base price of the admission ticket of Emerald Circle was indeed increased from Rs. 84.75/- to Rs. 89.29/-and Dress Circle was increased from Rs. 59.32/- to Rs. 62.50/-, as a result of which the benefit of reduction in GST rate from 18% to 12% (w.e.f. 01.01.2019), was not passed on to the recipients by way of commensurate reduction in prices charged (including reduced GST @ 12%). The total amount of profiteering covering the ....
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....eed to find whether there was any reduction in the GST rate and whether the benefit of reduction in the rate of tax was passed on or not to the recipients as provided under Section 171 of the CGST Act, 2017. 21. Section 171 of the CGST Act provides as under:- "(1). Any reduction in rate of tax on any supply of goods or services or the benefit of ITC shall be passed on to the recipient by way of commensurate reduction in prices. (2). The Central Government may, on recommendations of the Council, by notification, constitute an Authority, or empower an existing Authority constituted under any law for the time being in force, to examine whether ITCs availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him. (3). The Authority referred to in sub-section (2) shall exercise such powers and discharge such functions as may be prescribed. (3A) Where the Authority referred to in sub-section (2) after holding examination as required under the said sub-section comes to the conclusion that any registered person has profiteered under sub-s....
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....ed amount and GST on the said profiteered amount. Thus the profiteering is determined as Rs. 5,31,625/- as per the provisions of Rule 133 (1) of the CGST Rules, 2017. The Respondent is therefore directed to reduce the prices of his tickets as per the provisions of Rule 133 (3) (a) of the CGST Rules, 2017, keeping in view the reduction in the rate of tax so that the benefit is passed on to the recipients. The Respondent is also directed to deposit the profiteered amount of Rs. 5,31,625/- along with the interest to be calculated @ 18% from the date when the above amount was collected by him from the recipients till the above amount is deposited. Since the recipients, in this case, are not identifiable, the Respondent is directed to deposit the amount of profiteering of Rs. 5,31,625/- in the Central Consumer Welfare Fund (CWF) and the Telangana State CWF in two equal parts as per the provisions of Rule 133 (3) (c) of the CGST Rules, 2017, along with 18% interest. The above amount shall be deposited within a period of 3 months from the date of receipt of this Order failing which the same shall be recovered by the Commissioner CGST/SGST as per the provisions of the SGST Act, 2017. 25....