TaxTMI 
TaxTMI 
2026 (9) TMI 1481
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....nd Services Tax Act, 2017 (for short "the CGST Act, 2017") in so far as it failed to pass on the benefit of reduction in GST rates on cinema admission tickets from 18% to 12% w.e.f. 01.01.2019 vide Notification No. 27/2018-Central Tax (Rate) dated 31.12.2018 (for short "the Notification"). 2. The genesis of the present dispute lies in the reduction of the GST rate on "Services by way of admission to exhibition of cinematograph films" vide said Notification. Pursuant to this notification, the GST rate on tickets priced at one hundred rupees or less were reduced from 18% to 12% with effect from 01.01.2019. 3. The Respondent operates a theatre in Hyderabad selling tickets in three categories, namely Upper and Lower Balcony for Rs. 118/-, First Class for Rs. 80/- and Second Class for Rs. 50/- during the pre-rate reduction period effective from 01.12.2018 to 31.12.2018. After the above-mentioned notification, the respondent did not reduce its selling prices commensurately instead increased the base price and continued with the same selling price. 4. The application was examined by the Standing Committee on anti-profiteering and the same was forwarded to the Director General of ....
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.... the Section 171 of the CGST Act, 2017. Therefore, the period from 11.03.2019 onwards has no relevance from the perspective of the Section 171 of the CGST Act,2017 and hence no profiteering can be established for the period after 11.03.2019. (b) The Respondent has increased the price of the movie tickets of the first class and the second class only in the month of May, 2019 and this price increase cannot be correlated to provisions of Section 171 of the CGST Act, 2017. Since profiteering has been established against the Respondent in the categories of first class and second-class movie tickets, taking the view that the Authority is not a price regulator, the computation of profiteering merits to be limited only upto 10.03.2019. (c) The Authority directed the DGAP to re-compute the profiteering for the period limited to 10.03.2019 only." 11. Tenure of the NAA ended on 30.11.2022. Thereafter, the Competition Commission of India (hereinafter referred as to "the CCI") was empowered to examine matters related to Anti-profiteering with effect from 01.12.2022 vide Notification No. 23/2022-Central Tax dated 23.11.2022. 12. Pursuant to the Internal Order passed by NA....
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....pondent had sold admission tickets only in the State of Telangana and that the individual recipients/consumers were not identifiable from the information furnished. 16. The DGAP concluded that the Respondent had contravened the provisions of Section 171(1) of the CGST Act as it failed to pass on the benefit of the GST rate reduction to the recipients through a commensurate reduction in prices. 17. The Principal Bench of the GST Appellate Tribunal (for short "the GSTAT"), constituted under sub-section (3) of section 109 of the CGST Act, 2017, has been empowered to examine Anti-Profiteering cases w.e.f. 01.10.2024, vide Notification No. 18/2024-Central Tax dated 30.09.2024. Consequent upon the constitution of the GSTAT. Proceedings Before the GSTAT:- 18. A notice was issued to the Respondent calling upon their written submissions against the DGAP report dated 27.11.2020. Written Submissions on Behalf of The Respondent: 19. That the Respondent filed their written submissions to justify their action to increase the prices of cinema tickets and contended that it had not indulged in profiteering and submitted that:- (i) From the date on which the GST rate was r....
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..... Nidhi Dabas, Additional Assistant Director/ Authorised Representative appeared on behalf of the applicant and Shri Raj Tadla, Owner of the Theatre on behalf of the respondent. Oral Submissions on Behalf of The Parties:- 13. It is submitted on behalf of the DGAP that the Respondent maintained the movie ticket prices for first class and second class even after the reduction of the tax on "services by way of admission on exhibition of cinematograph films". Vide notification No. 27/2018-Central tax (rate) dated 31.12.2018, the rate of tax on cinema ticket was reduced from 18% to 12 % where the price of tickets were Rs. 100 or less w.e.f. 01.01.2019. However, the Respondent reduced the prices of cinema ticket for the first class and second class from 11.03.2019 to 08.05.2019. 14. The Respondent did not reduce the prices of cinema tickets commensurately instead increase the base price and continued with the selling price. 15. The computation of profiteering as illustrated in Table B and Table C is not controverted by the Respondent. The contentions of the Respondent that he had charged the from the customer the reduced prices of the tickers from the date on which the GST ra....
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....ty 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 the benefit of reduction in rate of tax on supply of goods or services or both or the benefit of input tax credit to the recipient by way of commensurate reduction in the price of the goods or services or both". 20. The provisions contained in Section 171 of the CGST Act mandate that any reduction in the rate of tax, on any supply of goods and services, the benefit of ITC should be passed on to the consumer by way of a commensurate reduction in prices....
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.... appropriated by the manufacturers, traders, distributors etc. To allow them to do so would amount to unjust enrichment. Consequently, when the Goods and Services Tax rate gets reduced or the benefit of input tax credit, becomes available as a necessary consequence the final price paid by the recipient obviously requires to be reduced. In the absence of such anti-profiteering provisions, there would be no legal obligation to pass on the benefit of the Goods and Services Tax regime and, consequently, the intended objective of reducing overall tax rates and mitigating the cascading effect would not be achieved." (Emphasis added) 23. In the present matter the period under investigation is from 01.01.2019 to 10.03.2019. 24. The Respondent failed to substantiate with any cogent evident which can indicate that from the date on which the GST rates were reduced he had charged reduced prices for its viewers. It is an admitted fact that the Respondent had reduced the prices of admission tickets for first class and second class from 11.03.2019 to 30.06.2019. Therefore, the DGAP has conducted present investigation for the period from 01.01.2019 to 10.03.2019. in absence of any e....
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.... of the Respondent, is that the Respondent did not challenge the methodology adopted by the DGAP for investigation and the calculation of the profiteering amount for the period 01.01.2019 to 10.03.2019. The Respondent has not disputed the report dated 27.12.2019. Consequently, it must be inferred that the facts, figures, calculations, observations, and conclusions drawn by the DGAP stand uncontested. 29. We take strength of a decision given by the Hon'ble Apex Court in Thangam v. Navamani Ammal (2024) 4 SCC 247, where no specific denial was made by the opposite party in their written statement against the averment made in plaint filed before the trial court, it is observed: "15. In the absence of para-wise reply to the plaint, it becomes a roving inquiry for the Court to find out as to which line in some paragraph in the plaint is either admitted or denied in the written statement filed, as there is no specific admission or denial with reference to the allegation in different paras. 15.1. Order VIII Rules 3 and 5 CPC clearly provides for specific admission and denial of the pleadings in the plaint. A general or evasive denial is not treated as sufficient. P....