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TMI Blog2020 (3) TMI 611X X X X Extracts X X X X X X X X Extracts X X X X ..... is actually due to that customer. In other words, each customer is entitled to receive the benefit of tax rate reduction or ITC on each product purchased by him. The word commensurate mentioned in the above Section gives the extent of benefit to be passed on by way of reduction in the prices which has to be computed in respect of each product supplied based on the extent of tax reduction as also the existing base price of the product before such tax rate reduction. The computation of commensurate reduction in prices is purely a mathematical exercise which is based upon the above parameters and hence it would vary from product to product and hence no fixed methodology can be prescribed to determine the amount of benefit which a supplier is required to pass on to a recipient or for computation of the profiteered amount. The Respondent has contended that the computation of profiteering by the DGAP was flawed on various counts. One contention made before us was in respect of 'Sub of the Day' (SOTD) which was sold by him @ ₹ 110/- till 14.11.2017 but the base price of SOTD had been incorrectly mapped by the DGAP to ₹ 105/- while working out the base price for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iate to mention that the Respondent has not only collected excess base prices from the customers which they were not required to pay due to the reduction in the rate of tax but he has also compelled them to pay additional GST on these excess base prices which they should not have paid. The Respondent has also contended that as per his franchisee-franchisor agreement with his franchisor M/s Subway Systems India Private Ltd., he was under an obligation to pay 8% of his net sales towards royalty and 4.5% of his net sales towards advertisement charges to the franchisor and that post 14.11.2017, when the tax rate was reduced, his cost towards royalty and advertising charges had increased significantly but the same was not considered by the DGAP while calculating profiteering - It is clear that an increase or decrease in costs of a supplier, which included costs such as royalty and advertisement charges or the costs towards the renovation of the store. has no ramification on the amount of profiteering which is computed in line with the provisions of Section 171 of the CGST Act. In case a supplier has not passed on the benefit of tax rate reduction by way of a commensurate reduction in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e further observe that had the Respondent passed on the benefit before 31.03.2019, he would have been investigated only till that date. Therefore, the period of investigation i.e. from 15.112017 to 31.03.2019 has been rightly taken by the DGAP. In the present case, we determine the profiteered amount as ₹ 8,24,260/-, details of the computation of which are given in in Annexure-16 of the DGAP Report dated 09,09.2019. Accordingly, the Respondent is directed to reduce his prices commensurately. As indicated in the above mentioned Annexure. in terms of Rule 133 (3) (a) of the above Rules. The Respondent is also directed to deposit an amount of ₹ 8 24 260/- in two equal parts of ₹ 4,12.1301- each in the Central Consumer Welfare Fund and the and the Maharashtra State Government as per provisions of Rule 133 (3) (c) of the above Rules, since the recipients are not identifiable at this stage and since the supplies were affected in the state of Maharashtra. Penalty - HELD THAT:- Since it has been found that the Respondent has denied the benefit of tax reduction to his customers/ recipients in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pients by way of commensurate reduction in prices and if so, to suo-moto determine the quantum thereof and indicate the same in his reply to the notice as well as furnish all the supporting documents. The Respondent was also allowed to inspect the non-confidential evidence/information which formed the basis of the investigation from 15.04.2019 to 17.04.2019, which was not availed of by the Respondent. 3. The DGAP further stated that the period covered by the current investigation was from 15.11.2017 to 31.03.2019 and this Authority vide its Order dated 19.06.2019 (Annex-2), had extended the time limit to complete the investigation up to 26.09.2019, in terms of Rules 129(6) of the CGST Rules. 4. The DGAP further stated that in response to the notice dated 09.04.2019 and subsequent reminders, the Respondent has submitted replies vide letters/e-mails dated 05.05.2019 (Annex-3), 11.05.2019 (Annex-4), 21.05.2019 (Annex-5), 27.05.2019 (Annex-6), 17.06.2019 (Annex-7), 26.07.2019 (Annex-8), 05.08.2019 (Annex-9), 08.08.2019 (Annex-10), 19.08.2019 (Annex-11), 22.08.2019 (Annex-12), 23.08.2019 (Annex-13) and 26.08.2019 (Annex-14) whereby the Respondent has summited that he had availed I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot. Section 171 (1) reads as follows:- Any reduction in rate of tax on any supply of goods or services or the benefit of ITC shall be passed on to the recipient by way of commensurate reduction in prices. Thus, the legal requirement of the above provision was abundantly clear that in the event of benefit of ITC or reduction in rate of tax. there must follow a commensurate reduction in the prices of the goods or services being supplied by a registered person and that the final price being changed for each supply had to be reduced commensurately with the extent of benefit and that there was no other legally tenable mode of passing on such benefit of rate reduction or ITC to the recipients/consumers. 8. The DGAP in his report has mentioned that the Respondent has been dealing with a total of 337 items while supplying restaurant services before and after 15.11.2017. On comparing the average selling prices as per details submitted by the Respondent for the period 01.07.2017 to 14.11.2017, and the prices post 15.11.2017 it was evident that 68 items supplied by him were launched in the post-rate reduction regime. He has been charging the lower GST rate of 5% on the increased base p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch was 8.01% of the net taxable turnover of restaurant service amounting to ₹ 37,34,976/- supplied during the same period. Further, with effect from 15.11.2017, the GST rate on restaurant service was reduced from 18% to 5% and hence, the said ITC was not available to the Respondent. A summary of the computation of ratio of ITC to the taxable turnover of the Respondent has been furnished by the DGAP as per Table-A below:- Table-A (Amount In Rs.) Particulars Jul-17 Aug-17 Sept.-2017 Oct.- 2017 Total ITC Availed as per GSTR-3B (A)* 71,998 80,060 61,670 85,714 2,99,442 Total Outward Taxable Turnover as per GSTR-3B (B) 939124 904778 964595 926479 34,34,976 Ratio of Input Tax Credit to Net Outward Taxable Turnover (C)=(A/B) 8.01% 11. The DGAP has further reported that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s commensurately. despite the reduction in GST rate from 18% to 5% w.e.f. 15.11.2017 stood confirmed against the Respondent. The additional amount to the tune of ₹ 8,24.260/- had been realized from the recipients which included both the profiteered amount and GST on the said profiteered amount and hence, the provisions of Section 171 (1) of the CGST Act, 2017 had been contravened by the Respondent in the present case. 14. The above Report was considered by this Authority in its sitting held on 17.09.2019 and it was decided to hear the Respondent on 07.10.2019. Sh. Girish Gulsanlal Behel, Partner, Sh. Vishal Khandelwal Sh. Amit Kumar Mittal, authorized representative represented the Respondent. 15. The Respondent vide his written submissions dated 01.11.2019 and 11.11.2019 has made the following submissions stating:- a. That in all Subway outlets, Sub of the Day (SOTD) was one of the popular selling products and was priced at ₹ 110/- till 14.11 2017. i.e. before the change in GST rate from 18% to 5%. However, the DGAP had wrongly considered the base price of the few SOTD items as ₹ 105/- instead of ₹ 110/-, which was applicable immediately before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. SOTD 6in Hare Bhara or 105 Aug 17 110 8,848.87 371.43 8,477.43 10. SOTD 6in Veg Shami or 105 Aug 17 110 71.03 2.98 68.05 11. SOTD 6in Veg Shami or C 105 Aug 17 110 710.28 29.81 680.46 41,030.33 1,722.26 39,308.08 b. That the Vegetarian Seekh kebab product was launched in the month of Jan'18 and sold thereafter. The DGAP, while calculating the profiteered amount, had inadvertently taken the base price of this product as ₹ 40/-, which was based on the sales of a different product in the month of October-2017. Hence, this item needed to be removed from the calculation of profiteering. The summary of the products and impact has been reproduced by the Respondent as menti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should be removed from the profiteered amount. d. That as per franchise agreement, he was required to pay 8% on net sales towards royalty and 4.5% towards advertisement charges to M/s Subway Systems India Private Limited along with GST@12% on royalty amount 18% on advertisement expenses. Basis of calculation of royalty and advertisement charge was net taxable sales. Therefore, post 14.11.2017. the cost of royalty had been increased by 1.769%. However, the DGAP while calculating profiteering had considered the base price of the products without considering the increase in royalty expenses which was directly calculated based on net sales and the same did not come under the purview of ITC loss. Hence, it should be reduced from the calculated profiteered amount. The Respondent has reproduced the calculation of the increase in royalty as mentioned below:- (Amount in Rs.) Particulars Before 15.11.2017 (A) Post Impact 15.11.2017 (B) Impact Basic Price - sample for illustration 100 112.38 Add: - G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23,680.34 26,647.50 6.Sept'18 45,557.01 21,179.65 24,377.36 7.Oct 18 51,408.12 24,651.04 26,757.08 8.Nov'18 54,646.60 31,738.76 22.907.85 9.Dec'18 47,012.68 27,535.59 19,477.09 10.Jan'19 46,738.34 27,985.25 18,753.09 11.Feb 19 81,290.32 58,906.58 22,383.74 12.Mar'19 95,243.86 71.333.16 23,910.70 801,327.35 433,342.87 367,984.48 f. That he has relied upon the case of Kumar Gandhrav vs. M/s KRBL Limited (Case Number 03/2018 dated 04-05-2018) = 2018 (5) TMI 760 - NATIONAL ANTI-PROFITEERING AUTHORITY passed by this Authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 856.62 Gross Total 37,702.72 h. That the DGAP, while calculating the profiteered amount, did not consider the prices of products which have been reduced by him and considered the impact on the profiteered amount as zero instead of negative value. That he had incurred an amount of ₹ 1,00,374/- on account of reduction in prices of the products after rate reduction which had not been considered by DGAP while calculating the profiteered amount. Given the above, the calculated profiteered amount should be reduced further by ₹ 1,00,374/-. A monthly summary in respect of his above claim has been furnished by the Respondent as mentioned is below:- (Amount in Rs.) List of Items Prices has been reduced Item Commensurate Base Price Base Price Reduction in Price Total Impact on profiteered Amount B.M.T. Sub 178.22 165.00 (13.22) 7.51 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50.00 (4.01) 1187.79 SUBWAY Item BtlDrk 91.81 85.00 (6.81) 1249.94 Turkey Chicken Slice 324.03 300.00 (24.03) 153.26 Veggie Delite Sub 129.61 120.00 (9.61) 5.20 100374.29 i. That the DGAP has not considered an amount of ₹ 1,18,000/- that had been incurred by him on account of items where the base prices were made zero under various kinds of sales promotion schemes such as free items to loyal customers, whole order discounts and BOGO offer. Therefore, the calculated profiteered amount should be reduced further by ₹ 1,18,000/-. Working in respect of the above claim has been furnished by the Respondent as has been mentioned below:- (Amount in Rs.) Summary of Free Items Month ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,410.07 Nov'18 1,610.61 Mar'18 2,166.70 Dec'18 1,692.52 Apr'18 2,622.82 Jan'19 2,127.45 May'18 2,408.48 Feb'19 1,728.50 June'18 2,451.45 Mar'19 2,170.07 July'18 1,536.08 - Gross Total 19,434.64 15,143.20 k. That as part of the franchise agreement, he needed to replace the store fixtures, machinery, equipment, etc. every 7 years. The renovation of the store was due in the month of November-2019 and for a similar size store for renovation, he had got a quotation of ₹ 19 25,196/- exclusive of GST. If this GST amount paid to the vendor had been allocated over the 7 years it would come around .041% of the turnover. He has further s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eral other business factors. This factor had not been considered in DGAP's calculations and the profiteering was calculated based on the increased base prices in January 2019 and February 2019. This required that the period for the calculation of the profiteered amount should be reasonable. n. That there were 67 Subway brand outlets operated by various franchisees in Mumbai itself and some of the stores were few meters away from his store. To keep the sanctity of the prices in the market and sustain in business he needed to maintain identical pricing as that of other Subway outlets in Mumbai. However, the interest of the customers had been kept in mind while arriving at the selling prices to be charged to the customers. The final impact on the customers was very minimal and, in some cases, even negative. He has also furnished below Table indicating the trend of past price revisions till the period of June-19:- (Amount in Rs.) Menu Product Name Jul 17 to Sep 17 Aug 17to 14 th Nov 17 (SOTD Increase) Price After 14 th Nov 17 Aug-18 (SOTD Increase) Mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 190 200 Chicken Tandoori 189 190 200 Chicken Slice 189 190 200 Turkey 195 195 205 Chicken Teriyaki 195 195 205 Italian B.M.T. 195 195 205 Tuna 195 195 205 Turkey Chicken Ham 195 195 205 Subway Club ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Turkey 254 250 250 Chicken Teriyaki 254 250 250 Italian B.M.T. 254 250 250 Tuna 254 250 250 Turkey Chicken Ham 254 250 250 Subway Club 254 250 250 Veggie Delite 266 270 280 Chatpata Chana Patty 266 270 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 354 360 370 Tuna 354 360 370 Turkey Chicken Ham 354 360 370 Subway Club 354 360 370 o. That on the issue of Methodology and Procedure of calculating profiteering, several petitions were pending in various High Courts. 16. A supplementary report was sought from the DGAP on the issues raised by the Respondent vide his above-mentioned submissions dated 11.11.2019 and the DGAP vide his Report dated 06.12.2019 has stated:- a. That the details of the period, from where the prices of the products has been arrived at, have been provided in column E of the base price sheet. The DGAP has elaborated on the steps taken for the determination of the base prices in the pre-rate reduction period. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivate Limited on the increased amount of Royalty and Advertisement Expenses, was a point of law, which this Authority only was statutorily empowered to look into. g. That the ITC accrued on account of purchase of capital goods for the period when the same was allowed to the Respondent, had already been accounted for calculating the ratio of denial of ITC. The Respondent was allowed to increase the base prices to offset the impact of denial of ITC. However, no benefit for loss of ITC on capital goods could be allowed to the Respondent that would have accrued in the future on expenses yet to be incurred on the date of the denial of ITC. h. That the excess (more than commensurate) benefit passed on by the Respondent to some buyers/ recipients could not be claimed to have offset the higher prices charged by him from his other buyers/ recipients. Similarly, the excess benefit passed on by the Respondent in some instances, where the prices charged by the Respondent for certain supplies to some of his buyers/ recipients were zero, could also not be claimed to offset the excess price charged by him from other buyers! recipients. Also, the zero prices charged by him in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Bangalore v. B. C. Srinivasa Setty 1981 2 SCC 460 = 1981 (2) TMI 1 - SUPREME COURT , wherein the Hon'ble Supreme Court has held that a charging section has to prescribe the method therefor, without which it became inapplicable and following the ratio thereof, in the absence of a statutorily prescribed methodology for calculation of profiteering, any such calculation became arbitrary and untenable. e. That he wanted to rely on the dictionary meaning of the words profiteer and profiteering and submits that he has not profiteered. 18. We have carefully considered the Report of the DGAP, the submissions made by the Respondent and the Applicant placed on record. On examining the various submissions we find that the following issues need to be addressed:- a. Whether the Respondent has passed on the commensurate benefit of reduction in the rate of tax to his customers? b. Whether there was any violation of the provisions of Section 171 (1) of the CGST Act, 2017 in this case? 19. Perusal of Section 171 of the CGST Act shows that it provides as under:- (1). Any reduction in rate of tax on any supply of goods or services or the benefit of ITC shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... teering. We also find it pertinent to mention that this Authority has no legislative mandate to fix the prices or the profit margins in respect of any supply (which are the rights of the supplier) and it is obligated by Section 171 of the CGST Act, 2017 to ensure that the benefit of the reduction in the rate of tax and/ or benefit of ITC (which is a sacrifice of revenue from the kitty of Central and State Governments in a welfare state) is passed on to the recipients, and, if tracked down the entire value chain, to the end consumers. The welfare of the consumers who are voiceless, unorganized and scattered is the soul of this provision. This Authority has been working in the interest of consumers as the trade is bound to pass on the benefit of tax reduction and ITC which become available to him due to revenue sacrificed by the Government. This Authority does not, in any manner, interfere in the business decisions of the Respondent and hence the functioning of the Authority and the anti-profiteering machinery is within the confines of the four walls of the provisions of Section 171 of the CGST Act 2017 and in no way violate the tenets of Article 19 (1) (g) of the Constitution. Keepi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elaborate upon this legislative intent behind the law, this Authority has notified the 'Procedure and Methodology' vide its Notification dated 28.03.2018 under Rule 126 of the CGST Rules, 2017. However, no fixed formula which fits all the cases of profiteering can be set while determining such a Methodology and Procedure as the facts of each case are different. In one real estate project, date of start and completion of the project, price of the house/commercial unit, mode of payment of price, stage of completion of the project, rates of taxes, amount of ITC availed, total saleable area, area sold and the taxable turnover realized before and after the GST implementation would always be different from the other project and hence the amount of benefit of additional ITC to be passed on in respect of one project would not be similar to another project. Therefore, no set parameters can be fixed for determining methodology to compute the benefit of additional ITC which would be required to be passed on to the buyers of such units. Moreover, this Authority under Rule 126 of the CGST Rules. has power to 'determine' Methodology Procedure and not to 'prescribe' i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any secondary data/ source. We also take note of the fact that the DGAP has compared the average pre rate reduction base prices with the actual post rate reduction prices of all the products supplied by the Respondent, including SOTD, due to the reasons that it was not possible to compare the average base prices pre and post rate reduction as the post rate reduction the benefit has to be legally passed to each buyer on the actual transaction value received by the Respondent from each of such buyer. Further, it was also not possible to compare the actual to actual base prices pre and post rate reduction (of SOTD or any other product) as the same buyer may have not purchased the very same product during both the above periods and some of the buyers may have purchased some products during the post rate reduction period and not during the pre rate reduction period or vice versa. Also, the Respondent has himself stated that he had charged different base prices to his customers for the same product on different days of any particular week/ month during the pre rate reduction period and therefore. the only alternative available was to compute the average base prices for the above period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich aimed to provide the benefit of rate reduction to the general public. The Respondent was legally not required to collect the excess GST and therefore, he has not only violated the provisions of the CGST Act. 2017 but has also acted in contravention of the provisions of Section 171 (1) of the above Act as he has denied the benefit of tax reduction to his customers by charging excess GST. Had he not charged the excess GST the customers would have paid less price while purchasing goods from the Respondent and hence the above amount has rightly been included in the profiteered amount as it denotes the amount of benefit denied by the Respondent. The above amount can also not be paid to the eligible buyers from the Consumer Welfare Funds as the Respondent has not deposited it in the above Fund. Therefore, the above contention of the Respondent is untenable and hence it cannot be accepted. 25. We find that the Respondent has also contended that as per his franchisee-franchisor agreement with his franchisor M/s Subway Systems India Private Ltd., he was under an obligation to pay 8% of his net sales towards royalty and 4.5% of his net sales towards advertisement charges to the franc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses of capital goods. In the context of this contention of the Respondent, we find that the DGAP has already factored the fact of denial of ITC to the Respondent w.e.f. 15.11.2017 in the computation which is based on the comparison of ratios of the Total ITC available to the Net Taxable Turnover in the pre rate reduction regime with the post rate reduction regime. It is pertinent that for the pre rate-reduction period. ITC on capital goods, if any, availed by the Respondent, has already been accounted for in the computation. Hence, the contention of the Respondent is without any merit. 27. The Respondent has further claimed that in the case of certain products supplied by him after the tax rate reduction. he had reduced the prices more than commensurately, but this aspect has been ignored by the DGAP, in as much as the DGAP has not considered the negative values and instead taken them as zero, whereas the profiteering should have been netted off. In this context. we observe that no 'netting off' can be applied in the case of profiteering, as the benefit that has to be passed on to each customer has to be necessarily computed on each product supplied Zeroing or netting of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e than commensurate) benefit to some customers cannot be claimed to offset the denial of benefit to other customers, wherein no benefit was passed on or where the benefit passed on was lesser than commensurate. Thus, such offsetting can not be permitted and hence we find no grounds to differ from the DGAP in the context of this issue. If such an offsetting was permitted, it would be detrimental to the interest of those customers/ recipients who had been denied commensurate benefit and hence the contention of the Respondent relating to his charging zero' price for certain supplies, is rejected as untenable. 29. The Respondent has further claimed that he was also supplying certain MRP based products, like soft drinks. where the tax rate was 28% plus 12% Cess in the pre-rate reduction as also the post rate reduction periods but after 14.11.2017, ITC to the tune of 28% GST and applicable cess stood denied to him, though he still had to pay the GST thereon at the time of purchase and as such, in respect of such MRP based products, where tax incidence on him had increased due to denial to ITC thereon, needed to be removed from the profiteered amount. We observe that this contenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Therefore, the period of investigation i.e. from 15.112017 to 31.03.2019 has been rightly taken by the DGAP. 31. The Respondent has also contended that he finds it inexplicable that the percentage profiteering vis-a-vis net sales turnover computed by the DGAP has sharply risen to 8.83% 10.15% of net sales turnover for Feb 2019 and March 2019. In this context, we find that the record shows that the DGAP has only calculated the percentage impact of denial of ITC i.e. 8.01% (ratio of ITC available for the period from July-2017 to October-2017 to the Total Taxable Turnover for the same period) and the DGAP has not computed the percentage of the profiteered amount to the sales turnover or the month-wise percentage of profiteering. Hence we do not see any basis for this contention. While observing as above, we take note of the fact that the record shows that not only the Respondent had not passed on the benefit of tax rate reduction to his customers/ recipients he had also increased the prices of his products in January-2019 and February-2019. Since the offence on the part of the Respondent has continued, the price charged in excess over and above what he should have charged (aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied upon the judgment passed by the Hon'ble Supreme Court of India in the case of Commissioner of Income Tax Bangalore vs. B.C. Srinivasa Setty 1981 2 SSC 460 = 1981 (2) TMI 1 - SUPREME COURT . A perusal of the said decision shows that it does not come to the rescue of the Respondent as no tax has been imposed under Section 171 of the CGST Act, 2017 and hence no machinery is required to assess it. 35. The Respondent has also relied upon the judgment passed in the case of M/s Basant Industries vs Asst. Collector of Customs 1996 (81) ELT 195 (SC) = 1995 (1) TMI 89 - SUPREME COURT . Upon a perusal of the above-said judgment shows that in that case, the Hon'ble Supreme Court had decided on an issue of valuation in the context of taxation, in a matter which has no similarity with the case before us wherein the issue of profiteering has to be decided in accordance with the provisions of Section 171 of the CGST Act 2017. Therefore, the above-mentioned case is also found to be of no help to the Respondent. 36. Given our above findings and observations, in the present case, we determine the profiteered amount as ₹ 8,24,260/-, details of the computation of which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sement expenses on the increased value of net taxable sales which was allowed to the franchisee (in this case, the Respondent) to offset the impact of denial of ITC. Further, M/s SSIPL was recommending the sales price of the products to his franchisees but was not involved in the purchase of goods/material or services for the supply of restaurant services. Therefore, given the above, there was effectively no denial of ITC to M/s SSIPL and it appeared to be resorting to profiteering by charging royalty and advertisement charges on the increased base price from the franchisee. Hence. the DGAP has sought directions to investigate the above-discussed issue, either from the Standing Committee under Rule 129 (1) of the CGST Rules. 2017 or from this Authority under Rule 133 (5) of the CGST Rules, 2017. In this regard, we observed that M/s SSIPL acts as a price monitoring authority for the products to be sold by the franchisee, provides his sale and purchase software to the franchisee and also charges royalty and advertisement charges on the increased base price charged by the franchisee. Therefore, this Authority finds no reason to differ with the finding of the DGAP that there may be cha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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