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GST branch finds Hardcastle Restaurants guilty of profiteering Rs 74 bn

NAA has also issued a show-cause notice to Hardcastle Restaurants to explain why penalty should not be imposed

Press Trust of India  |  New Delhi 

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The anti-profiteering authority (NAA) has found Hardcastle Restaurants, a franchisee of fast food chain McDonald's, guilty of not passing on rate cut benefits of over Rs 74.9 billion to consumers.

was operating quick service under the brand name McDonald's in the Western and Southern regions of India.

Complaints were filed against the restaurant accusing it of keeping the prices of the products same despite a reduction in the rate from 18 per cent to 5 per cent with effect from November 15, 2017.

The Directorate General of Anti-Profiteering (DGAP) in the course of investigation has found that the restaurant has not passed over Rs 74.9 billion worth benefit due to reduction in the rate of tax as also the benefit of input tax credit (ITC) availed by the restaurant.

The amount includes the extra Goods and Services Tax (GST) which "forced the customers to pay due to wrong increase in basic prices, otherwise the prices to be paid should have further got reduced by the amount of the illegally charged...," the said.

The (NAA), in its order, has held that had resorted to profiteering by charging more price.

The asked Hardcastle Restaurants to reduce the prices by way of commensurate reduction, keeping in view the reduced rate of tax and the benefit of which has been availed.

Also since the complainants were not identifiable, the asked the restaurant to deposit over Rs 74.9 billion in the consumer welfare fund, along with 18 per cent interest, within a period of three months.

The NAA has also issued a show-cause notice to Hardcastle Restaurants to explain why penalty should not be imposed.

First Published: Mon, November 19 2018. 21:20 IST
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