Tata Starbucks kept the retail sale price of the product pre and post GST rate reduction intact
DGAP has found that Starbucks profiteered ₹4.51 crore
NEW DELHI :
The GST investigative arm has found Tata Starbucks guilty of profiteering to the tune of ₹4.51 crore by not reducing prices of coffee despite a cut in the rate.
Investigation by the Directorate General of Anti Profiteering (DGAP) has revealed that Tata Starbucks, the equal joint venture between the Tata and global coffee chain Starbucks, had hiked the base price of one its coffee variant after the GST Council cut tax rates on restaurants from 18 per cent to 5% with effect from November 15, 2017.
Following that, restaurants were supposed to adjust their base price after taking into account the unavailability of credit on input. However, there have been complaints from customers that restaurants have hiked their base price of the products in such a way that the final sale price remained the same both pre and post GST rate cut.
"According to estimates the unavailability of ITC benefits can push up the cost of product by 10-12%. However, in some cases we have seen that the base price has been increased by as much as 85%," one of the source told PTI.
After studying the books of accounts of a company, the DGAP gives its report to the NAA for further action. If the NAA finds a firm guilty of profiteering then the amount profiteered has to be refunded to consumers by the company.
In case where the consumers cannot be identified, the amount has to be deposited into the consumer welfare fund of the Centre and states.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.
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