TMI Blog2020 (9) TMI 498X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Respondent during the period of investigation. Therefore, it can be concluded that there was no profiteering in the Emerald category of admission tickets. It has been established that the Respondent has resorted to profiteering by way of either increasing the base prices of the service while maintaining the same selling prices or by way of not reducing the selling prices of the service commensurately, despite a reduction in GST rate on Services by way of admission to exhibition of cinematograph films where price of admission ticket is one hundred rupees or less from 18% to 12% w.e.f. 01.01.2019 to 30.06.2019. On this account, the Respondent has realized an additional amount to the tune of ₹ 5,31,625/- from the recipients which included both the profiteered amount and GST on the said profiteered amount. Thus the profiteering is determined as ₹ 5,31,625/- as per the provisions of Rule 133 (1) of the CGST Rules, 2017. The Respondent is therefore directed to reduce the prices of his tickets as per the provisions of Rule 133 (3) (a) of the CGST Rules, 2017, keeping in view the reduction in the rate of tax so that the benefit is passed on to the recipients. The R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent in respect of the supply of Services by way of admission to exhibition of cinematograph films despite the reduction in the rate of GST from 28% to 12% w.e.f. 01.01.2019. 2. Vide his Report, the DGAP has reported that Applicant No. 1 had alleged that the Respondent had not passed on the benefit of reduction in the GST rate on Services by way of admission to exhibition of cinematograph films from 28% to 12% which came into effect on 01.01.2019 vide Notification No. 27/2018-central Tax (Rate) dated 31.12.2018. Along with the Application form APAF-1, Letter dated 26.03.2019 of the Respondent requesting for information regarding reduction of movie tickets prices and letter dated 29.03.2019 of the Applicant No. 1 to the Standing Committee on Anti-profiteering. 3. The DGAP has stated that on receipt of the aforesaid reference from the Standing Committee on Anti-profiteering, a notice under Rule 129 of the Rules was issued on 08.07.2019 calling upon the Respondent to respond as to whether he admitted that he had not passed on the benefit of reduction in GST rate w.e.f. 01.01.2019 to his recipients by way of commensurate reduction in prices and, if so, to suo moto dete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01.01.2019, during the period from 01.09.2018 to 30.06.2019. (b) Price List of the aforesaid movie admission tickets, pre and post 01.01.2019. (c) Sample copies of the invoices/tickets, pre and post 01.01.2019. 8. The DGAP has reported that vide e-mail dated 13.02.2020, the Applicant No. 1 was allowed to inspect the non-confidential documents/reply of the Respondent on 17.02.2020 to 18.02.2020, which was not availed of by the Applicant No. 1. The DGAP has further reported that the period covered by the current investigation was from 01.01.2019 to 30.06.2019. 9. The DGAP also reported that he has examined the reference from the Standing Committee on Anti-profiteering and the documents/evidence on record. The main issues to be examined in the present matter were whether the GST rate on Services by way of admission to exhibition of cinematography films where price of admission ticket is above one hundred rupees was reduced from 28% to 18% w.e.f. 01.01.2019 and Services by way of admission exhibition of cinematograph films where the price of the admission ticket is one hundred rupees or less was reduced from 18% to 12% w.e.f. 01.01.2019 and if so, whether the benefit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the recipients by the Respondent. 14. The DGAP has further stated that on the issue of determination and quantification of the profiteering by the Respondent, it was observed from the details of the sales made available that the Respondent had increased the base prices of the admission ticket when the GST rate was reduced from 18% to 12% w.e.f. 01.01.2019. The same has been illustrated by the DGAP in the below Table-A:- Table-A (Amount in Rs.) Sr. No. Category of Admission ticket 01.12.2018 to 31.12.2018 01.01.2019 to 30.06.2019 The amount charged i.e inclusive of tax (in Rs.) GST Rate (%) Price of Ticket i.e. Base Price (in Rs.) The amount charged i.e inclusive of tax (in Rs.) GST Rate (%) Price of Ticket i.e. Base Price (in Rs.) Commensurate Base Price (in Rs.) The amount which was to be Charged (in Rs.) A B C D E=[C/118%] F G H I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ets in the Emerald category (₹ 30/-) during the period from 01.01.2019 to 30.06.2019. Therefore, there wasn't any profiteering in the case of Emerald. The total amount of net higher sale realization due to an increase in the base prices of the movie tickets, despite the reduction in CST rate from 18% to 12% or in other words, the profiteered amount came to ₹ 5,31,625/-. The details of the computation have been furnished by the DGAP in the Table B below.- Table-B (Amount in Rs.) Sr. No Admission ticket 01.01.2019 to 30.06.2019 Base Price charged (Rs.) Commensurate Base Price (Rs.) The excess amount charged per ticket (Rs.) Excess tax charged per ticket @ 12% Profiteering per unit (Rs.) Qty. Sold Total Profiteering (including tax @12%) (in Rs.) A B C D E=[C-D] F=(E*12%) G=(E+F) H I=(H*G) 1 Emerald Circle 89. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing him to explain why the Report dated 26.02.2020 furnished by the DGAP should not be accepted and his liability for violation of the provisions of Section 171 of the CGST Act, 2017 should not be fixed. The Respondent has been provided ample opportunities to appear before this Authority to counter the investigation carried out by the DGAP. The Respondent was accorded personal hearing and was directed to file his consolidated written submissions vide Order dated 19.03.2020, 01.06.2020 and 22.06.2020. However, the Respondent neither appeared for the hearing nor did he submit his written submissions in respect of the findings of the DGAP. Therefore, vide Order dated 24.07.2020, the Respondent was proceeded against ex-parte 19. We have carefully examined the submissions of the Applicants as also the case record placed before us and it has been revealed that the Central and the State Governments had reduced the rates of GST on Services by way of admission to exhibition of cinematograph films where the price of admission ticket was above one hundred rupees from 28% to 18% and Services by way of admission to exhibition of cinematograph films where the price of admission ticket was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Circle category as mentioned in Table-A above. Therefore, the Respondent has not reduced the base prices of the admission tickets in respect of the Emerald Circle and Dress Circle categories, instead maintained the pre-rate reduction cum tax prices by increasing the base prices of the above categories of admission tickets. Further, in respect of the prices of admission tickets for the Emerald category, it was found that no sales had been made by the Respondent during the period of investigation. Therefore, it can be concluded that there was no profiteering in the Emerald category of admission tickets. 23. Since the Respondent has not submitted any written submissions against the DGAP's report, we don't find any reason to differ from the findings of the DGAP that the Respondent has contravened the provisions of Section 171 of the CGST Act, 2017. 24. On the basis of the facts discussed above, it has been established that the Respondent has resorted to profiteering by way of either increasing the base prices of the service while maintaining the same selling prices or by way of not reducing the selling prices of the service commensurately, despite a reduction in GST rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.06.2019 when the Respondent had committed the above violation and hence, the penalty prescribed under Section 171 (3A) of the Act cannot be imposed on the Respondent retrospectively. Accordingly, notice for imposition of penalty is not required to be issued to the Respondent. 26. Further, this Authority as per Rule 136 of the CGST Rules 2017 directs the Commissioners of CGST/SGST Telangana to monitor this Order under the supervision of the DGAP by ensuring that the amount profiteered by the Respondent as ordered by this Authority is deposited in the respective Consumer Welfare Funds (CWFs). A report in compliance of this Order shall be submitted to this Authority by the DGAP within a period of 4 months from the date of receipt of this Order. 27. As per the provisions of Rule 133 (1) of the CGST Rules, 2017 this order was required to be passed within a period of 6 months from the date of receipt of the Report from the DGAP under Rule 129 (6) of the above Rules. Since, the present Report has been received by this Authority on 27.02.2020 the order was to be passed on or before 26.08.2020. However, due to prevalent pandemic of COVID-19 in the Country this order could not be pas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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