2026-VIL-112-GSTAT-DEL-NAPA
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  2. 2026-VIL-112-GSTAT-DEL-NAPA

SGST Tribunal

GST - Anti-profiteering - Failure to pass on benefit of reduction in GST rate on cinema admission tickets from 18% to 12% - Respondent, operating a single-screen theatre selling tickets in three categories, did not reduce the cum-tax selling price of tickets after the rate reduction but instead increased the base price, thereby maintaining the same selling price and denying the benefit of the rate reduction to recipients - Respondent contended that ticket prices were fixed by the State Government and it was not permitted to reduce prices, that the ticket amount included charges other than admission which the DGAP failed to bifurcate, and that no invoices are issued and no goods are supplied to viewers - 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 - The State Government orders relied upon only fix the maximum permissible price and do not prohibit a theatre owner from reducing prices upon a reduction in tax, the discretion to reduce prices resting with the theatre owner - The Respondent's admission of having increased the base price while maintaining the same cum-tax price constitutes admission of non-passing of the benefit of tax reduction - Costing and market-related factors, including charges other than the ticket price, are irrelevant to the enquiry, which is confined to whether the tax reduction was passed on by way of commensurate reduction in price - The methodology and computation adopted by the DGAP remaining unchallenged and uncontested by the Respondent, the facts, figures and conclusions of the DGAP stand established - Respondent failed to discharge the burden of justifying the price increase - DGAP report and supplementary 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 - Anti-profiteering - Leviability of penalty under Section 171(3A) of the CGST Act, 2017 for the period during which profiteering was established - Recipients of the services for the period under investigation being unidentifiable - Whether penalty can be levied upon the Respondent for the profiteered amount pertaining to the period from 01.01.2019 to 31.10.2019 - HELD - Where the recipients are not identifiable, the case is covered under Rule 133(3)(c) of the CGST Rules, 2017 - The provision for levy of penalty came into force only with effect from 01.01.2020, and no penalty can be levied retrospectively for the period prior thereto - No penalty held leviable upon the Respondent for the period from 01.01.2019 to 31.10.2019.
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