TaxTMI 
TaxTMI 
2026 (2) TMI 98
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....chal Commissionerate, Hyderabad made an application to the Standing Committee alleging profiteering by the Respondent with respect to supply "Services by way of admission to exhibition of cinematography films". The Standing Committee made a reference to The of DGAP to conduct a detailed investigation in the matter. 4. It was alleged that the Respondent did not pass on the benefit of reduction in the GST rate on the "Services by way of admission for exhibition of cinematograph films where price of admission ticket is one hundred rupees or less from 18% to 12% w.e.f. 01.01.2019, vide Notification No. 27/2018 Central Tax ( Rate dated 31.12.2018 and instead, increased the base price of tickets to maintain the same cum-tax selling price. The ....
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.... of cinematography films where price of admission ticket is Rs. 100 or less" from 18% to 12% and 28% to 18% where the price of the ticket is above Rs 100 w.e.f. 01.01.2019 vide notification no 27/2018-Central Tax (Rate) 31.12.2018 11. During the investigation, it is observed that there were 3 main categories of tickets of MRP Rs. 80 Rs. 60 and Rs. 30 respectively sold by the Respondent during the pre as well as post rate reduction period. Effective from 01.01.2019 and the cum-tax price of these three categories of tickets remained same after the rate reduction which resulted into the profiteering in terms of Section 171 of the Central Goods and Services Tax Act, 2017. 12. It was also observed that the Respondent has sold the tickets @....
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....g, by way of increasing the base price of the tickets, by way of not reducing the selling price commensurately, despite the rate reduction in GST from 18% to 12%, where the price of admission ticket is above Rs. 100 or less and 28% to 18% where the price of the ticket is above Rs. 100 stands proved. Total amount of profiteering is calculated to the tune of Rs. 2,50,148.39. Thus, the Respondent has contravened the provision under Section 171 of the CGST Act, 2017 and has not passed the benefit of input tax credit to the recipient by commensurate reduction in the price of the tickets. 17. Section 171 of the Goods and Services Tax, 2017 reads thus;- "Section 171 Antiprofiteering measure.- (1). Any reduction in rate of tax ....
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....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-section (1), such person shall be liable to pay penalty equivalent to ten per cent. of the amount so profiteered: Provided that no penalty shall be leviable if the profiteered amount is deposited within thirty days of the date of passing of the order by the Authority. Explanation.-For the purposes of this section, the expression "profiteered" shall mean the amount determined on account of not passing ....