TaxTMI 
TaxTMI 
2026 (3) TMI 1437
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....nd 18% for ticket priced at Rs. 100/- or less per person per show. These rates were reduced to 18% and 12% respectively w.e.f. 01.01.2019 vide Notification No. 27/2018-CT (Rate) dated 31.12.2018. 2. On 31.05.2019, an application was received by the Standing Committee on Anti-Profiteering from the Principal Commissioner, Medchal Commissionerate, Hyderabad, alleging profiteering by the Respondent. The Standing Committee referred the matter to DGAP on 09.10.2019 for a detailed investigation. 3. That in response to the DGAP's notice dated 21.10.2019 and subsequent summons dated 16.01.2020 and 29.02.2020, the Respondent submitted his reply vide letters/e-mails dated 20.12.2019, 23.01.2020 and 13.02.2020. However, no information/documents as mentioned in the Notice dated 21.10.2019 were submitted by the Respondent. Meanwhile, the Respondent filed Writ Petition (Civil) No. 2938/2020 before the Hon'ble Telangana High Court against the Notice dated 21.10.2019 and the summons dated 29.01.2020 issued by the DGAP for seeking information/documents for investigation. Subsequently, the Hon'ble Telangana High Court vide order dated 12.12.2023 disposed of the said Writ Petition. 4. Accordi....
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....le 100 18% 84.75 100 12% 89.29 84.75 94.92 4.54 2 Balcony 80 18% 67.80 80 12% 71.43 67.80 75.93 3.63 100 89.29 67.80 75.93 21.49 3 1st Class 60 18% 50.85 60 12% 53.57 50.85 56.95 2.72 80 71.43 50.85 56.95 20.58 4 2nd Class 30 18% 25.42 30 12% 26.79 25.42 28.47 1.36 40 35.71 25.42 28.47 10.29 7. The DGAP had further quantified the data based on pre-and post-GST data and outward supplied details (where GST rate was reduced from 18% to 12%) The computation is detailed in Table -B below. Table-B S.No. Class of Admission ticket 01.01.2019 to 30.09.2019 Base Price charged (Rs.) Commensurate Base Price (Rs.) Excess amount charged per ticket (Rs.) Excess tax charged in Rs. per ticket @ 12% Total Profiteering per ticket (Rs.) Qty. Sold Total Profiteering in Rs. (including tax @12%) A B C D E= F= E*12% G= (E+F) H I= (H*G) (C - D) 1 Family Circle 89.29 84.75 4.54 0.545 5.08 81075 412,266 2 Balcony 71.4....
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....of India and issued notice dated 26.06.2024 to the Respondent to show cause why the findings should not be accepted. 11. The Respondent filed written submissions on 03.11.2025, and on 23.01.2026 along with annexures. The Respondent contended that the Director General of Anti-profiteering failed to take into consideration that the prices being charged by the Respondent is within the maximum permissible limit set by the Regulating Authority, i.e. the State Government. The Respondent has submitted that under the Telangana Cinema (Regulation) Act, 1955, maximum ticket prices are determined by the Licensing Authority and non-compliance entails prosecution; although G.O.M. No. 100 dated 26.04.2013 was quashed by the High Court of Telangana on 31.10.2016 with liberty to theatres to inform proposed fares pending committee review, the State thereafter issued G.O.Ms No. 75 dated 23.06.2017 prescribing revised caps within which the Respondent operated, and any enhancement during 01.01.2019-30.09.2019 was effected pursuant to specific judicial permission and due intimation to the Licensing Authority. Further, the Respondent has also submitted that due to the difficulties faced in running a ....
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....d to levy only Rs. 3/- per ticket to remain competitive. 11.3 The Respondent claimed to have written several letters to the joint collector of Sangareddy District to charge increased prices for tickets during the relevant time period which should be excluded from the profiteering. The details of the letter written is as mentioned below. S.No. Date of Letter Time Period Movie Name Total Sales 1 05.01.2019 09.01.2019 to 24.01.2019 NTR, Kathanauyukudu and F2 33,00,300/- 2 23.04.2019 09.05.2019 to 22.05.2019 Maharshi 31,11,390/- 04.05.2019 3 16.08.2019 30.08.2019 to 12.09.2019 Saaho 15,58,647/- 26.08.2019 Total 79,70,335/- 12. A copy of the Respondent's submissions was forwarded to DGAP for clarification. The DGAP submitted that as regards the Respondent stand that the prices being charged by the Respondent is within the maximum permissible limit set by the Regulating Authority, i.e the State Government Section 171 of the Central Goods and Services Tax Act, 2017 clearly obligates every supplier to pass on the benefit of reduction in tax rate or input tax credit to the recipient by way ....
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....ubjected to GST. Accordingly, the said Rs. 3/- per ticket was required to be included while discharging output tax liability and while determining the commensurate price reduction upon reduction of GST rates w.e.f. 01.01.2019. This position stands affirmed in DGAP vs. Mallikarjuna Cinema Hall, 70 MM Hyderabad, wherein it was categorically held that the maintenance charge forms part of the ticket value and GST is payable thereon. Therefore, the Respondent's contention lacks legal basis and is accordingly rejected. • The Respondent advanced arguments in reply, and the Representative of the DGAP also filed clarifications dated 23.01.2026 (received via email) in response to the submissions made by the Respondent. The DGAP submitted that, in Para 1, the Respondent has merely furnished details of correspondence addressed to the Joint Collector, Sangareddy District, seeking permission for enhancement of ticket prices, which is a matter of record and does not call for any specific comments. In Para 2, reference has been made to the Tribunal's Order dated 16.12.2025 directing submission of quantified sales data for the relevant period; the same being factual in nature, requires....
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....nder the G.S.T. is reduced, the benefit should immediately be passed on to the end-user by way of reduction in the prices commensurate with the reduction in the rate of tax. This, in other words, would mean that, the moment there is a cut in the rate of G.S.T., the price of the commodity or the services rendered has to be reduced automatically to the extent of the reduction in the rate of tax. If the supplier continues to sell the product at the same price particularly when the prices are inclusive of G.S.T., the respondent-Department or the beneficiary is not being benefitted by the Government's decision in lowering the rate of tax. A reading of Sections 171 & 172 of the G.S.T. Act does not show any exception carved out in the event non-reduction in the price of the tickets, nor is the authority empowered to relax the conditions so enumerated under Section 171 (1). This, in other words, also mean that the provision of Sections 171 (1) has to be strictly adhered to. In the aforesaid context, when we look at the impugned order in the aforementioned admitted factual backdrop, we do not find any illegality so committed by the respondent-Authority which has passed the impugned order in....
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....contrary, increased the base price of cinema tickets. As a result, the benefit of tax reduction was not passed on to the recipients, leading to profiteering amounting to Rs. 19,86,640/- for the period from 01.01.2019 to 30.09.2019. The Respondent has sought to justify the same by contending that ticket prices are regulated under the Cinemas Act. However, In the case of DGAP vs. Mallikarjuna Cinema Hall, 70 MM, Hyderabad, it was held in para 28 as under: "The Cinemas Act, the Government orders and the judgment passed by the Hon'ble Telangana High Court, if read Page 21 of 34 together would only mean that the prices of ticket for admittance to Cinema Hall in the state of Telangana are monitored by a Committee which fixes the maximum price, beyond which a cinema owner cannot charge a person for admittance into a theatre to watch a cinematography film. However, the fixing of prices of a particular class, or any locality or particular show is the discretion of the theatre owners. As far as this discretion is concerned, it has not been tampered with or in any way restricted by the local law and Special law as mentioned above, except prescribing a higher limit. Moreover Rs. 3/....
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....s." In view of the above mentioned Judgment by Coordinate Benches of this Tribunal and considering that the facts of the present case are identical to the aforesaid cases, I find no merit in the contention of the Respondent. 15.1 The Respondent has further contended that the Hon'ble High Court of Telangana, vide Order dated 26.04.2019, permitted charging of higher ticket prices. The relevant portion of the said Order is reproduced below: "In the view of the above submissions, this writ petition is being disposed of, in terms of order dated 28.06.2018 passed in W.P No. 21782 of 2018, directing the Respondent to allow the petitioners to run their respective cinema theatres as per the rates mentioned in their respective applications submitted to the Respondent concerned." It is observed that the above Order relies upon an earlier Order dated 28.06.2018 passed in W.P. No. 21782 of 2018, the relevant extract of which reads as under: "During the course of hearing, learned counsel for the petitioner submits that the issue involved in the present writ petition is squarely covered by the Order dated 31.10.2016 in the W.P No. 19046 of 2014 and batch.' From the a....
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....sts." In light of the above binding judicial pronouncements, the plea of the Respondent is found to be devoid of merit. 15.3 It is further observed that although the Respondent had addressed several letters to the Joint Collector, Sangareddy District, seeking permission to charge enhanced ticket prices, no permission letter or order authorizing such increase for the relevant period has been produced on record. Hence, the contention of the Respondent in this regard is liable to be rejected. 15.4 On the claim that the DGAP misconstrued the scope and ambit of Section 171 of the Central Goods and Services Tax Act, 2017 it is submitted that the legal position is already clear from the above referred decision in DGAP vs. Mallikarjuna Cinema Hall, 70 MM Hyderabad, which relied on the judgment of the Hon'ble Delhi High Court in Reckitt Benckiser India Pvt. Ltd. v. Union of India. The relevant portion of the decision is reproduced hereunder: "119 This Court is in agreement with the submission of learned Amicus Curiae that if there is any variation on account of other factors, such as any costs necessitating the setting off of such reduction of price, the same needs to be j....