2026-VIL-113-GSTAT-DEL-NAPA
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SGST Tribunal

GST - Anti-profiteering - Failure to pass on benefit of reduction in GST rate on cinema admission tickets from 18% to 12% - Respondent did not reduce ticket prices commensurately upon the rate reduction and instead increased the base price for two categories, maintaining the same cum-tax selling price, while reducing prices only for a subsequent limited period which was excluded from investigation - Whether the Respondent contravened Section 171 of the CGST Act by failing to pass on the benefit of the rate reduction by way of commensurate reduction in prices - HELD - Section 171 mandates that any reduction in rate of tax shall be passed on to the recipient by way of commensurate reduction in prices, admits of no exception, and must be strictly adhered to - Costing and market-related factors, including considerations such as the performance or age of a movie or demand, are irrelevant to the enquiry, which is confined to whether the tax reduction was passed on by way of commensurate reduction in price - The Respondent failed to substantiate with cogent evidence that it had charged reduced prices from the date of the rate reduction, and did not challenge the methodology or computation of profiteering adopted by the DGAP, which therefore stands uncontested - The contention that no benefit of input tax credit could be retained since tickets involve no stocking of goods does not detract from the obligation to pass on the benefit of rate reduction, given that the Respondent is registered and supplies taxable services - Freedom to determine prices in a fair and transparent manner cannot be used to defeat the statutory requirement of passing on the benefit of the rate reduction - Respondent failed to discharge the rebuttable presumption of profiteering by producing cogent evidence to justify the increase in base price - DGAP report accepted and objections of the Respondent rejected - Respondent held to have contravened Section 171 of the CGST Act, 2017 and directed to deposit the profiteered amount along with interest in the Consumer Welfare Funds – Ordered accordingly
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