2024 (2) TMI 413 - CCI - GST

Profiteering - supply of Services by way of admission to exhibition of cinematography films . - Benefit of tax reduction not passed on section 171 of CGST Act - HELD THAT - This Commission has carefully gone through the Reports dated 31.12.2020, 03.03.2023 and 30.11.2023 furnished by the DGAP as well as all the other material placed on record and finds that the Respondent has reduced the rate of GST from 28 % to 18% on all categories of tickets w.e.f. 04.02.2019 and hence he has passed on the benefit of rate reduction by charging commensurate prices - The Commission also finds that there is no Exception category tickets and it was a term coined by DGAP in its report dated 31.12.2020. It referred to six specific movies for which application for rate revision was made by the Respondent to the Licensing Authority. The Respondent had sold 'Exception Category' cinema tickets w.e.f. 23.08.2019 only. The Respondent has charged CST @ 18% on the Exception category tickets w.e.f 23.08.2019 and hence no benefit of tax reduction was required to be passed on these tickets. The Commission further finds that the Respondent has increased the base prices of 'Exception' category of tickets after about 6 months w.e.f. 23.08.2019 after he had passed on the benefit of tax reduction w.e.f. 04.02.2019 and further charged GST @ 18%, hence this increase in the base prices does not attract the Anti-Profiteering Provisions. The instant case does not fall under the ambit of Anti-Profiteering provisions of Section 171 of the CGST Act, 2017. Accordingly, the proceedings initiated against the Respondent under Rule 133 (4) of the CGST Rules, 2017 are hereby dropped.

Summary

Issues involved:
The issues involved in the judgment are related to alleged profiteering in the supply of services by way of admission to the exhibition of cinematography films, specifically focusing on the 'Regular' and 'Exception' categories of tickets sold by the Respondent.

Summary:

Investigation and Contradictory Reports:
The Competition Commission of India received a report from the Director General of Anti-Profiteering regarding alleged profiteering by the Respondent. The Commission found the previous reports contradictory and directed further investigation under Rule 133(4) of the CGST Rules, 2017.

Profiteering Calculation and NAA Order:
The DGAP's report calculated profiteering in 'Regular' and 'Exception' categories of tickets. The National Anti-Profiteering Authority (NAA) determined profiteering in the 'Regular' category and directed the Respondent to deposit the amount in consumer welfare funds. Further investigation was directed for the 'Exception' category.

Reinvestigation and Contradictory Findings:
The DGAP reinvestigated the 'Exception' category profiteering and submitted a report. The Commission found discrepancies in the DGAP reports and directed further reinvestigation under Rule 133(4) of the CGST Rules, 2017.

Commission's Findings:
After reviewing all reports and materials, the Commission concluded that the Respondent had passed on the benefit of GST rate reduction to customers by charging commensurate prices. It was found that there was no 'Exception' category of tickets, and the term was coined by the DGAP. The Respondent had sold 'Exception' category tickets after the GST rate reduction, and the increase in base prices did not attract anti-profiteering provisions.

Decision and Conclusion:
As the Respondent had already passed on the profiteering amount to complainants in the 'Regular' category, and considering the findings, the Commission determined that the case did not fall under the anti-profiteering provisions of the CGST Act, 2017. Therefore, the proceedings against the Respondent were dropped, and the order was to be supplied to all parties involved.