NAA agrees to withdraw name of Subway Systems in order against franchisee

The National Anti-profiteering Authority (NAA) has agreed to remove the name of Subway Systems India Private Ltd, the licensee of the Subway brand in the country, in a case against the company's franchisee Dough Makers India Private Ltd.

This was informed by a counsel of NAA in the Delhi High Court. This may set a precedent wherever franchisers are named as respondents in a case against franchisees.

Subway Systems counsel Abhishek Rastogi said NAA's move will provide great relief to various franchisers that are not part of the transaction between the franchisee and customers but have been dragged into the investigation process.

This case relates to alleged profiteering by Dough Makers after goods and services tax (GST) was reduced on November 15, 2017. The Authority calculated the profiteered amount at Rs 78,41,754.

Subway Systems was named as one of the respondents in the case, which the company said in its petition to the court was a gross violation of natural justice.

The counsel of NAA handed over to the court a copy of the authority's instructions which says that it has no objection in deleting Subway Systems from the proceedings carried out by the body created under the GST Act.  

Earlier, Subway Systems had said the Authority and its investigation wing computed the alleged profiteered amount arbitrarily on the pretext that the franchiser did not provide invoice and item wise data of its franchisee.

The Authority had stated that Subway Systems did not submit records and information that was supposed to be maintained by its franchisee.