Govt serves Anti-Profiteering notices to McDonald’s franchisee, Lifestyle, Honda Dealer.
NEW DELHI: Hardcastle Restaurants Pvt Ltd, the master franchisee of fast-food McDonald’s franchisees for West and South India, retailer Lifestyle and and Sharma Trading Ltd, a Jaipur-based dealer of Hindustan Unilever’s Vaseline, for not passing the benefits of reduced taxes and input tax credit under the Goods and Services Tax (GST) to the customers.
The Directorate General Safeguards(DGS) issued notices to at least five entities, including Gurgaon realtor Pyramid Infratech and Jaipur-based entity, Sharma Trading, for allegedly charging 28% tax on Vaseline when the tax rate had been slashed to 18% on 15th November.
The notice sent to Hardcastle Restaurants Pvt Ltd in Mumbai, a consumer has complained that the restaurant has charged the same price of a cup of coffee(McCafe Regular Latte) as stated remained unchanged at Rs 142 even with the government reducing GST Tax Rate from 18% to 5%.
apart from, a departmental store has complained that Sharma Trading Company has not proceeded on the benefit of reducing Tax rate From 28% to 18% on Vaseline VTM 400 ml.
On 15 December 2017, the DGS had sent notices to Haryana-based real estate company, Pyramid Infratech Pvt Ltd, and a Bareilly-based Honda’s authorized car dealer for complaints against profiteering under the new indirect tax system. apart from, it had received 36 complaints against real estate Pyramid Infratech based in Gurugram, Haryana, for not passing on benefits of cost reduction post-GST rollout.
According to the structure of the anti-profiteering mechanism under the GST regime, complaints of local nature will be first sent to the state-level screening committee while complaints of the national level will be marked for the Standing Committee.
If the complaints have merit, the respective committees would refer the cases for further investigation to the DGS. The DGS would generally take about 3 months to complete the investigation and send the report to the anti-profiteering authority.
If the authority finds that a company has not passed on GST benefits, it will either direct the entity to pass on the benefits to the buyer or if the recipient cannot be identified will ask the company to transfer the amount to the buyer welfare fund within a specified period.
The authority has the power to cancel the registration of any entity or business if it fails to pass on to the buyer the benefit of lower taxes under the GST regime, but it would probably be the last step against any violator.
According to the anti-profiteering rules, the authority will suggest the return of the undue profit earned from not passing on the reduction in tax to consumers along with an 18% interest as also appoint penalty.