2026-VIL-33-GSTAT-DEL-NAPA
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SGST Tribunal

GST - Anti-profiteering – Not passing on of benefit of rate reduction on cinema ticket – Respondents increased the base price of admission tickets despite a reduction in GST rate with effect from 01.01.2019 - The investigation by the DGAP established that the Respondents increased base prices across various ticket categories during the post-rate-reduction period – HELD - The statutory mandate under Section 171 requires that any reduction in the rate of tax on supply of goods or services must be passed on to the recipient through commensurate reduction in prices. The intention behind the anti-profiteering provision is that the moment the GST rate is reduced, the benefit should immediately be passed on to the end-user by way of price reduction proportionate to the tax reduction. When prices are inclusive of GST, maintaining the same selling price while increasing the base price effectively denies the benefit of Government's decision to lower the tax rate. The Respondents’ contention regarding State licensing authority permissions lacks documentary substantiation. The Respondents failed to produce any government order or court order from the relevant period permitting the price increase. The subsequently filed Government orders pertaining to the year 2025 cannot be treated as evidence for matters occurring in 2019. Further, these orders do not prohibit theatre owners from reducing ticket prices when the central government reduces GST rate - The Section 171 places the onus on the service supplier to reduce prices to pass on the tax benefit, irrespective of regulatory permissions for price increases - The Respondent is directed to deposit the profiteered amount along with interest at 18 percent from 28.06.2019 onwards, with 50 percent of the amount plus interest deposited in the Central Consumer Welfare Fund and the remaining 50 percent plus interest deposited in the State Consumer Welfare Fund. No penalty is levied upon the operator as the penalty provision came into force on 01.01.2020 and cannot be applied retrospectively for the period from 01.01.2019 to 30.06.2019. The operator's objections to the anti-profiteering reports are rejected – Ordered accordingly
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