2018 (10) TMI 1615 - NAPA - GST

Profiteering - restaurant service - benefit of reduction of tax from 18% to 5% not passed to customers - it was also alleged that Respondent was illegally profiteering by appropriating the amount of reduction of tax by fleecing the poor customers as he was denying them the benefit of reduction - Held that - The investigation conducted in the matter by the Applicant No. 2 against the Respondent No. 1 could not establish profiteering for want of credible evidence and hence no violation of the provisions of Section 171 of the CGST Act 2017 could be established - there are no violation of the provisions of Section 171 of the CGST Act, 2017 - application dismissed.

Summary

Issues: Allegation of profiteering against Respondent No. 1 under Section 171 of the CGST Act, 2017.

Analysis:
1. The case involved an allegation of profiteering against Respondent No. 1, who was accused of not passing on the benefit of tax reduction from 18% to 5% to customers. The Applicant claimed that the Respondent was illegally profiteering by not reducing prices despite the tax rate decrease.

2. The Applicant No. 2, Director General Anti-Profiteering, conducted an investigation based on the complaint. However, the Applicant No. 1 did not provide necessary information despite multiple requests for pre and post GST invoices. The Applicant No. 2 found it challenging to investigate as there were numerous outlets of the brand in question, making it difficult to pinpoint specific instances of profiteering.

3. Both parties were given an opportunity to present their case before the Authority. The Applicant No. 1 did not appear, while the Applicant No. 2 and Respondent No. 1 were represented during the hearing. The Respondents No. 2 and 3 did not attend.

4. The Respondent No. 1 argued that the investigation did not find any specific evidence of profiteering against him, and the Applicant No. 2 recommended no further action. The Respondent contended that the allegation of profiteering was not substantiated, and the proceedings should be dropped.

5. The Authority considered the investigation report, submissions from both parties, and concluded that the evidence presented did not establish profiteering by the Respondent No. 1. As a result, the application seeking action under Section 171 of the CGST Act, 2017 against the Respondents was deemed not maintainable and dismissed. The order was to be shared with all concerned parties, and the case file was to be closed upon completion.