Case Details: DGAP vs. Kumar 70 MM (2026) 39 Centax 349 (Tri.-GST-Delhi)
Judiciary and Counsel Details
- Justice Mayank Kumar Jain, Member (J)
Facts of the Case
A reference was received by the Director General of Anti-Profiteering (DGAP) from the Standing Committee for conducting a detailed investigation into allegations of profiteering by the respondent theatre owner in respect of supply of services by way of admission to exhibition of cinematography films. The investigation examined the impact of reduction in GST rate on cinema exhibition tickets pursuant to Notification No. 27/2018-Central Tax (Rate), dated 31-12-2018. The respondent contended that the theatre was operating on the basis of lease rent and therefore the reduction in GST rate on tickets from 18 per cent to 12 per cent would not be applicable to it. It was, however, observed that three categories of tickets were sold, namely Balcony, Dress Circle and Lower Class, and the actual cum-tax prices of these tickets remained unchanged even after the rate reduction. The investigation further revealed that the respondent had increased the base price of these tickets while maintaining the same final price charged from customers. The matter was thereafter adjudicated under the anti-profiteering provisions of Section 171 of the CGST Act and the Delhi GST Act and was carried in appeal before the GST Appellate Tribunal (GSTAT). The matter was accordingly placed before the GSTAT.
GSTAT Held
The GST Appellate Tribunal (GSTAT) held that pursuant to the reduction in GST rate on admission to exhibition of cinematography films under Notification No. 27/2018-Central Tax (Rate), dated 31-12-2018, it was obligatory upon the respondent to pass on the benefit of such reduction to recipients by way of commensurate reduction in ticket prices. The Tribunal observed that instead of reducing the final price of tickets, the respondent had increased the base price while continuing to charge the same cum-tax price from customers. It was therefore held that the benefit of GST rate reduction had not been passed on to recipients as required under Section 171 of the CGST Act and the Delhi GST Act. Consequently, the respondent was found to have indulged in profiteering and was directed to deposit the profiteered amount along with applicable interest in the Central and State Consumer Welfare Funds in accordance with law.
List of Notifications Cited
- Notification No. 27/2018-Central Tax (Rate), dated 31-12-2018
