Jubilant FoodWorks, the operator of Dominos Pizza chain in India, has been found guilty of not passing on GST-cut benefit of Rs 41.42 crore on sale of some pizza products. It has been directed to deposit the illegal gains with the government.
The National Anti-Profiteering Authority (NAA) had received one complaint filed by a customer that Jubilant FoodWorks had not reduced the prices of ‘Dominos Stuffed Garlic Bread’ and ‘Medium Veg Pizza’ despite a cut in GST rate from 18 to 5 percent. The authority had passed the order on an email.
The NAA found that Jubilant FoodWorks has not passed on the benefit of reduction in the rate of tax to its customers during the period November 15, 2017 to May 31, 2018.
It found that profiteered amount illegally earned by Jubilant FoodWorks is over Rs 41.42 crore and also asked the company to decrease the prices of its products as per the new tax reductions.
The NAA said, “The Respondent (Jubilant FoodWorks) is directed to refund to the applicant an amount of Rs 5.65 along with interest @18% from the date of charging the above amount from him till its refund. He is further directed to deposit the balance amount of Rs 41,42,97,629.25 in the ratio of 50:50 in the Central and the State Consumer Welfare Funds along with interest @18 % till the same is deposited, within a period of 3 months.”
The NAA also added, “It is clear that the Respondent has resorted to profiteering by charging more price than what he could have charged by issuing wrong tax invoices. He has further acted in conscious disregard of the obligation which was cast upon him by the law, by issuing incorrect invoices in which the base prices were deliberately enhanced more than what he was entitled to increase due to denial of ITC and thus he had denied the benefit of reduction in the rate of tax.”
As well as the NAA authority has also issued a show cause notice to Jubilant FoodWorks to explain why penalty should not be imposed on the company.