NEW DELHI: Hardcastle Restaurants, McDonald’s franchisees for West and South India, retailer Lifestyle and a Honda dealer are among entities that are facing anti profiteering action for not passing on the gains of Goods and Services Tax (GST) to consumers.
The DG Safeguards issued notices to at least five entities, including Gurgaon realtor Pyramid Infratech and Jaipur-based entity, Sharma Trading, for allegedly charging 28 per cent tax on Vaseline when the tax rate had been slashed to 18 per cent on November 15. But it is the case against Hardcastle Restaurants, which can shake the sector, as the probe is based on a complaint that the price of a cup of coffee allegedly remained unchanged at Rs 142 despite the government reducing GST from 18 per cent to 5 per cent.
Several restaurants had increased menu prices, resulting in a situation where the gain to the customer was reduced, a move that did not go down well with the government. While the notice initiating investigation was issued by DG Safeguards on December 29, Hardcastle Restaurants said: “We have not received any such communication.
The Lifestyle International declined to comment. Similarly, the notice issued to Pyramid Infratech has said that 36 buyers have accused the builder of not passing on the benefit of input tax credit to them, which would have lowered the total consideration for flats booked under the Haryana Affordable Housing Scheme. In addition, there is a complaint against Bareilly-based car dealer accusing it of charging higher taxes when a Honda car booked in April was delivered in July, after GST had been implemented.
In all cases, the complaints have been vetted by the standing committee on antiprofiteering, for which a penalty has been prescribed in the law to ensure that sellers pass on the benefits of lower taxes to consumers or do not overcharge tax. All the entities have been asked to submit documents and replies.