Domino’s under scrutiny for not passing GST cuts to customers: Report

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The DG of Anti-Profiteering found that Domino’s had not reduced prices of all its food products after the GST Council cut the tax rate on restaurants last November

On Jul 27, 2018 : Pizza chain Domino’s is under the scrutiny of anti-profiteering authorities for not passing on a cut in Goods and Services Tax (GST) to consumers, according to a report by The Economic Times.

The Directorate General of Anti-Profiteering found that Domino’s had not reduced prices of all its food products after the GST Council cut the tax rate on restaurants last November, and instead passed on the benefit selectively.

“An investigation report has been issued,” a government official aware of the development told the newspaper.

A Jubilant FoodWorks spokesperson told the paper that the company believes it passed on the benefits to consumers. Jubilant FoodWorks (JFL) operates Domino’s restaurants in India under a franchise deal with American chain Domino’s Pizza Inc.

“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). However, JFL believes it has passed on the benefit on account of the reduction of GST rates to the customers and accordingly will represent its case before NAA,” the spokesperson was quoted as saying.

In November, the GST Council had slashed the tax rate for restaurants to 5 percent from 18 percent earlier. The government has also set up a National Anti-Profiteering Authority (NAA) under the GST to ensure that businesses pass on the benefit of the recent tax rate cuts to consumers.

Under the NAA 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.

Once a complaint is filed, the committee passes the complaints that have merit to the DG of anti-profiteering for an investigation, which has to be completed in three months. The DG then sends the report to the National Anti-Profiteering Authority, which issues the order.