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Economic Times
6 days ago
- Business
- Economic Times
GST court passes order against Subway franchisee for not passing rate cut benefit to customer
In its first order in profiteering case, the newly constituted GST Appellate Tribunal (GSTAT) has held Urban Essence, a franchisee of Subway Ltd, guilty of not passing GST rate cut benefit of Rs 5.47 lakh. The Goods and Services Tax Appellate Authority (GSTAT) order dated August 5 upheld the Directorate General of Anti-profiteering (DGAP) report that Urban Essence has profiteered to the extent of Rs 5.47 lakh by not passing on a commensurate reduction of the prices of food products to customers. The order in this regard was passed by GSTAT President Justice (Retd) Sanjaya Kumar Mishra. The appellate tribunal directed the Pune-based entity to deposit a sum of Rs 5,45,005 along with an 18 per cent interest from November 15, 2017 and deposit tha same in the consumer welfare fund in Maharashtra within 3 months. The case pertained to a customer complaint against Urban Essence for not passing the benefit of reduction of GST rate, on restaurant services, from 18 per cent to 5 per cent with effect from November 15, 2017. The GSTAT also looked into the issue of whether the entity was eligible to claim input tax credit (ITC) on some invoices. The DGAP, which investigated the case, had covered the period from November 15, 2017 to October 31, 2019, to check whether the GST rate cut benefits were passed to consumers. On December 1, 2022, the Competition Commission of India (CCI) was given the responsibility to decide on anti-profiteering cases under GST. Such cases were earlier decided by the National Anti-Profiteering Authority (NAA). From October 1, 2024, the Principal Bench of GSTAT has been empowered to examine anti-profiteering cases. AMRG & Associates Senior Partner Rajat Mohan said the DGAP vs Urban Essence decision marks the first final order from the GSTAT's anti-profiteering division, signalling that the division is now fully operational, with the President himself conducting hearings and delivering orders. "This sets the tone for a more structured and authoritative approach to anti-profiteering enforcement under Section 171. The Tribunal's stance-upholding DGAP's findings across all products and rejecting cost-based justifications-reinforces that GST rate cut benefits must be directly passed on to consumers, backed by strong documentation, or face decisive action," Mohan added
Mint
6 days ago
- Business
- Mint
GSTAT passes order against Subway franchisee for not passing rate cut benefit to customer
New Delhi, Aug 13 (PTI) In its first order in profiteering case, the newly constituted GST Appellate Tribunal (GSTAT) has held Urban Essence, a franchisee of Subway Ltd, guilty of not passing GST rate cut benefit of ₹ 5.47 lakh. The Goods and Services Tax Appellate Authority (GSTAT) order dated August 5 upheld the Directorate General of Anti-profiteering (DGAP) report that Urban Essence has profiteered to the extent of ₹ 5.47 lakh by not passing on a commensurate reduction of the prices of food products to customers. The order in this regard was passed by GSTAT President Justice (Retd) Sanjaya Kumar Mishra. The appellate tribunal directed the Pune-based entity to deposit a sum of ₹ 5,45,005 along with an 18 per cent interest from November 15, 2017 and deposit tha same in the consumer welfare fund in Maharashtra within 3 months. The case pertained to a customer complaint against Urban Essence for not passing the benefit of reduction of GST rate, on restaurant services, from 18 per cent to 5 per cent with effect from November 15, 2017. The GSTAT also looked into the issue of whether the entity was eligible to claim input tax credit (ITC) on some invoices. The DGAP, which investigated the case, had covered the period from November 15, 2017 to October 31, 2019, to check whether the GST rate cut benefits were passed to consumers. On December 1, 2022, the Competition Commission of India (CCI) was given the responsibility to decide on anti-profiteering cases under GST. Such cases were earlier decided by the National Anti-Profiteering Authority (NAA). From October 1, 2024, the Principal Bench of GSTAT has been empowered to examine anti-profiteering cases. AMRG & Associates Senior Partner Rajat Mohan said the DGAP vs Urban Essence decision marks the first final order from the GSTAT's anti-profiteering division, signalling that the division is now fully operational, with the President himself conducting hearings and delivering orders. "This sets the tone for a more structured and authoritative approach to anti-profiteering enforcement under Section 171. The Tribunal's stance—upholding DGAP's findings across all products and rejecting cost-based justifications—reinforces that GST rate cut benefits must be directly passed on to consumers, backed by strong documentation, or face decisive action," Mohan added.
Time of India
6 days ago
- Business
- Time of India
GST court passes order against Subway franchisee for not passing rate cut benefit to customer
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel In its first order in profiteering case, the newly constituted GST Appellate Tribunal GSTAT ) has held Urban Essence , a franchisee of Subway Ltd , guilty of not passing GST rate cut benefit of Rs 5.47 Goods and Services Tax Appellate Authority (GSTAT) order dated August 5 upheld the Directorate General of Anti-profiteering (DGAP) report that Urban Essence has profiteered to the extent of Rs 5.47 lakh by not passing on a commensurate reduction of the prices of food products to order in this regard was passed by GSTAT President Justice (Retd) Sanjaya Kumar appellate tribunal directed the Pune-based entity to deposit a sum of Rs 5,45,005 along with an 18 per cent interest from November 15, 2017 and deposit tha same in the consumer welfare fund in Maharashtra within 3 case pertained to a customer complaint against Urban Essence for not passing the benefit of reduction of GST rate, on restaurant services, from 18 per cent to 5 per cent with effect from November 15, GSTAT also looked into the issue of whether the entity was eligible to claim input tax credit (ITC) on some DGAP, which investigated the case, had covered the period from November 15, 2017 to October 31, 2019, to check whether the GST rate cut benefits were passed to December 1, 2022, the Competition Commission of India (CCI) was given the responsibility to decide on anti-profiteering cases under GST. Such cases were earlier decided by the National Anti-Profiteering Authority (NAA).From October 1, 2024, the Principal Bench of GSTAT has been empowered to examine anti-profiteering & Associates Senior Partner Rajat Mohan said the DGAP vs Urban Essence decision marks the first final order from the GSTAT's anti-profiteering division, signalling that the division is now fully operational, with the President himself conducting hearings and delivering orders."This sets the tone for a more structured and authoritative approach to anti-profiteering enforcement under Section 171. The Tribunal's stance-upholding DGAP's findings across all products and rejecting cost-based justifications-reinforces that GST rate cut benefits must be directly passed on to consumers, backed by strong documentation, or face decisive action," Mohan added
Mint
10-08-2025
- Business
- Mint
India's tax enforcer shift gears to hunt big-ticket fraud, spare the small fry
India's apex goods and services tax (GST) enforcement agency has a new priority: chasing deliberate and high-impact tax evasion and fraud over technical disputes. The Directorate General of GST Intelligence (DGGI) has accorded higher priority to investigating individuals and entities causing major damage to the economy through systematic tax evasion, over issues such as errors in classification of goods or services, two persons with direct knowledge of the development said. While tax evasion and fraud are already top priority for DGGI, a sharper focus on these is expected to be a stronger deterrent, fetching more revenue to the exchequer while ensuring effective utilisation of time and resources, one of them explained. This approach will also ensure the industry is spared of investigations by the specialised agency into technical tax matters The use of shell companies to fabricate bogus transactions and conduct circular trading is among DGGI's top priority areas, the person mentioned above said. Circular trading in this context is when two or more entities manipulate the trade channel to wrongfully claim input tax credit or inflate sales without actual movement of goods. 'In some cases, this has been combined with bank frauds by inflating turnover to get bigger loans as well as stock market frauds by manipulating share prices," the person mentioned earlier said. 'A similar modus operandi of planned GST evasion is by selling goods and services without bills so as to declare lower turnover and pay lower taxes." Metal scraps, tobacco, and plywood are sectors highly prone to tax evasion, and will remain in DGGI's focus, this person said, adding that clandestine supply of goods and services will also receive high attention. DGGI did not reply to queries emailed on Saturday. Ripple-through benefits Experts said that by focusing on deliberate and high-impact GST frauds, DGGI will create a fairer playing field for genuine businesses, who will no longer face the same level of scrutiny for minor or technical disputes. 'This will free up time and resources for industry to focus on growth and innovation rather than prolonged litigation," said Rajat Mohan, senior partner at AMRG and Associates, a chartered accountant firm. 'At the same time, curbing organised tax evasion will protect government revenues, strengthen the formal economy, and boost investor confidence—benefits that ultimately ripple through to job creation and sustainable economic growth." DGGI's latest approach reflects the Union government's targeted strategy to check tax evasion and wrongful input tax credit claims while ensuring speedy closure of investigations, quick disposal of grievances and complaints, and faster refunds, as highlighted by finance minister Nirmala Sitharaman at a conference of senior officials last month. As per official estimates, in the five years through 2024-25, authorities detected more than ₹7 trillion of GST evasion in about 91,000 cases. Of this, ₹1,29,175 crore has been voluntarily deposited by assessees, Union minister of state for finance Pankaj Chaudhary informed the Lok Sabha on 4 August. In FY25, the extent of evasion detected was ₹2.23 trillion, of which ₹26,799 crore has been voluntarily deposited by assessees, the minister informed.
Economic Times
25-06-2025
- Business
- Economic Times
CBIC outlines detailed procedures for review, revision, and appeal for orders passed by Common Adjudicating Authorities
The CBIC has established clear procedures for review, revision, and appeal of orders issued by Common Adjudicating Authorities, addressing jurisdictional ambiguities arising from multi-state DGGI notices. The Principal Commissioner or Commissioner of Central Tax will act as the reviewing authority and handle appeals. This move aims to streamline processes and reduce litigation uncertainty for industries facing extensive GST investigations. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads The Central board of indirect taxes and customs (CBIC) Tuesday outlined detailed procedures for review, revision, and appeal for orders passed by Common Adjudicating Authorities The move aims to eliminate jurisdictional confusion for cases where companies have received complex, multi-state notices from directorate general of GST intelligence (DGGI), where the lack of defined appellate authority created procedural delays and litigation instruction specifies that Principal Commissioner or Commissioner of Central Tax under whom the Common Adjudicating Authority is posted will serve as the reviewing authority under Section 107 of the CGST same authority will also hold revisional powers under Section sections deal with taxpayers appeal against the demand or against orders from the Common Adjudicating Authority will lie with the Commissioner (Appeals) having territorial jurisdiction over the Principal Commissioner or Commissioner of Central Tax under whom the authority is Principal Commissioner or Commissioner of Central Tax will represent the department in appeal proceedings and may appoint a subordinate officer to file departmental said this will help industries receiving multiple notices and reflects the government's evolving commitment to procedural fairness in high-stakes investigations across sectors."This circular will have far-reaching implications across sectors frequently targeted in large-scale GST investigations, including banking, insurance, online gaming, hospitality, real estate, FMCG, manufacturing, and logistics," Rajat Mohan, Senior Partner, AMRG & Associates said.
