Domino’s in the crosshairs with anti-profiteering authorities for not passing on GST cut to consumers

July 27, 2018

 

The Directorate General of Anti-Profiteering has found that Domino’s- the pizza chain did not  reduce the prices of all its food products after the GST Council cut the tax rate on restaurants and passed on the benefit selectively. Anti-profiteering provisions make it compulsory for companies to pass on any benefits from a lower GST rate to consumers. The GST Council in its November 15, 2017 meeting slashed tax rate for restaurants to 5 per cent from 18 per cent.

In India, Jubilant FoodWorks operates Domino’s restaurants under a franchise deal with American chain Domino’s Pizza Inc. and has got tangled with the anti-profiteering authorities for not passing on a cut in goods and services tax to consumers.

An investigation report has been issued and the company has received a copy of the investigation report submitted by the Director General Anti-Profiteering (DG) to the National Anti-Profiteering Authority (NAA)

Though, JFL considers that it has passed on the benefit on account of reduction of GST rates to the customers and accordingly will represent its case before NAA.

The government had created the anti-profiteering framework to shield consumers from any runaway price rise post rollout of GST from July 1 last year. Under the provisions, all complaints at the national level are examined by a standing committee and at the state level by state screening committees consisting of officials.

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