Jubilant Found Guilty Of Not Passing GST Benefit On Sale Of Domino’s Pizza

Jubilant FoodWorks Ltd., the operator of Domino’s Pizza chain in India, has been found guilty of not passing on the goods and services tax cut benefit of Rs 41.42 crore on sale of some products and has been directed to deposit the illegal gains with the government.

The National Anti-Profiteering Authority passed the order on an email complaint filed by a customer that Jubilant FoodWorks had not reduced the prices of ‘Domino’s Stuffed Garlic Bread' and ‘Medium Veg Pizza' despite a cut in GST rate from 18 percent to 5 percent.

The GST rate on restaurants was cut to 5 percent without input tax credit from 18 percent, effective Nov. 15, 2017.

The anti-profiteering authority held that Jubilant FoodWorks has not passed on the benefit of reduction in the tax rate to its customers during the period Nov. 15, 2017 to May 31, 2018.

It asked the company to reduce the prices of its products by way of commensurate reduction in taxes.

“The respondent (Jubilant FoodWorks) is directed to refund to the applicant an amount of Rs 5.65 along with interest at the rate of 18 percent from the date of charging the above amount from him till its refund. It 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 at the rate of 18 percent till the same is deposited, within a period of three months,” the National Anti-Profiteering Authority said.

It also asked the Directorate General of Anti-Profiteering, which investigated the case, to conduct further investigation after May 31, 2018 to check if the benefit of tax reduction was passed to customers.

“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,” the National Anti-Profiteering Authority said.

The authority has also issued a show cause notice to Jubilant FoodWorks to explain why the penalty should not be imposed on the company.

Jubilant FoodWorks operates quick service restaurant from 1,128 outlets across 31 sates and union territories.