The National Anti-profiteering Authority (NAA) has asked its investigative wing to probe all cinema theatres owned by bollywood actor Ajay Devgn's NY Cinemas to assess whether the company has profiteered by not passing on the benefits of GST rate cuts on film tickets to movie goers.
Explaining the case, Harpreet Singh, partner at KPMG, said the Authority also found that the company had profiteered to the tune of Rs 3,90,272 by not passing on these GST cuts to consumers at one of its cinema theatres in Hapur in Uttar Pradesh.
The Authority asked the company to give Rs 14 with interest to a movie goer who had complained against NY Cinemas. Since the remaining consumers are not identifiable, the company has been asked it to deposit the remaining Rs 390,258 to the consumer welfare fund.
The NAA also directed that a show cause notice be served on the company seeking an explanation as to why penalty should not be imposed on it.
NY Cinemas was also asked to reduce the prices of all its tickets in line with GST cuts.
The company has theatres in eight cities, besides Hapur, according to its site.
The GST Council had cut tax rate from 28 per cent to 18 per cent on movie tickets costing over Rs 100 and from 18 per cent to 12 per cent on tickets costing up to Rs 100 with effect from January 1, 2019.
The NAA wanted the company to cut the prices of all tickets in proportion to reduction in the GST rates. The company had cut prices in some categories and for some shows.
“With this and a few other recent rulings, it is abundantly clear that passing of more benefit to one customer at the cost of another customer, is not acceptable and would not be treated as compliant to anti-profiteering provisions.” Singh said.