Grounds of Writ-The Director General of Anti-Profiteering (DGAP) alleged that the Respondent failed to pass on the benefit of the Goods and Services Tax (GST) rate reduction on cinema tickets, effective from 01.01.2019. wherein the rates were reduced from 28% to 18% and 18% to 12%. Instead of eftecting a commensurate price reduction, the Respondent increased the base ticket prices, resulting in a total profiteering amount of Rs16,50,166.In response, the Respondent justified the pricing structure on grounds of State Government dynamics,regulations, prevailing
market dynamics, and increased operational costs.However, the Respondent failed to substantiate that the price adjustments aligned with the statutory obligation under Section 171 of the Central Goods and Services Tax (CGST) Act, which mandates the passing of tax benefits to consumers.
Order-The Tribunal ruled in favour of the Revenue, holding that the Respondent had engaged in profiteering by failing to pass on the benefit of the GST rate reduction. Consequently, the Respondent was directed to deposit Rs 16,50,166, along with interest at 18% per annum on a sum of Rs 27,350 (calculated proportionately for the period 28 to 30 June 2019), into the Central and State Consumer Welfare Funds. The Order is to be complied with within one month, and a compliance report is required to be submitted within four months from the date of the Order.
GST Case Law DGAP Versus Mallikarjuna Cinema Hall, 70MM Hyderabad
Citation-2025 TAXONATION 2439 (GSTAT NEW DLHI)(Click here to read full case law)
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