Anti-Profiteering — The brief facts of the case are that an application dated 01.01.2018 was filed by the Applicant No. 1 before the Standing Committee constituted under Rule 123 (1) of the above Rules alleging that the Respondent has not passed on the benefit of reduction in the rate of GST in restaurant service, when he had purchased “6 Hara Bhara Kabab Sub”.

It was also alleged that the Respondent had increased the base price of the product from Rs. 130/- to Rs. 145/- when the GST was reduced from 18% to 5%.

Held that—
It is apparent from the facts of the case that the Respondent had increased the base price of his products to make good the loss which had occurred due to denial of ITC post GST rate reduction. It is further revealed that the Respondent had increased the average base price by 12.14% to neutralize the denial of ITC of 11.80% and such increase is commensurate with the increase in the cost of the product on account of denial of ITC. Therefore, the allegation of not passing on the benefit of rate reduction is not established against the Respondent. As far as the issue of profiteering of Rs. 452/- made on the supply of the products on 14.1 1.2017 is concerned the same can not be termed as profiteering in terms of Section 171 of CGST Act, 2017 as there was no rate reduction on 14.11.2017 as the same had occurred w.e.f. 15.11.2017 only.

the Respondent has not contravened the provisions of Section 171 of the CGST Act, 2017 and hence there is no merit in the application filed by the Applicant No. 1 and the same is accordingly dismissed.—N.P. Foods (Franchisee M/S Subway India), In Re… [2018] 04 TAXLOK.COM 137 (NAPA)