Director-General of Anti-Profiteering Vs Lite Bite Travel Foods Pvt. Ltd

The application had been filed under Rule 128 of the CGST Rules 2017, alleging profiteering in respect of restaurant service supplied by the Respondent (Franchisee of M/s. Subway Systems India Pvt Ltd.). In the application. it was alleged that despite the reduction in the rate of CST from 18% to 5% w.e.f, 15.11.2017, the Respondent had not passed on commensurate benefit since he had increased the base prices of his products.

HELD BY AAR:

Respondent has denied the benefit of tax reduction to the customers in contravention 01 the provisions of Section 171 (1) of the CGST Act, 2017 and he has thus resorted to profiteering. Hence, he has committed an offence under section 171 (3A) of the CGST Act, 2017, and therefore, he is liable to penal action under the provisions of the above Section. Accordingly, a notice be issued to him directing him to explain why the penalty prescribed under Section 171 (3A) of the above Act read with Rule 133 (3) (d) of the CGST Rules, 2017 should not be imposed on him.