HARDCASTLE RESTAURANTS PVT. LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) Rule. Rule is made returnable forthwith. Respondents waives service. Taken up for final disposal.

(2.) The Goods and Service Tax regime was introduced in the year 2017. Thereafter tax rates for certain items were reduced. The State noticed that the benefit of reduced tax rates was not being passed on to the consumers. For this purpose, the National Antiprofiteering Authority is constituted under section 171 of the Goods and Services Tax Act. The Authority can direct the registered persons to pass on such benefits to the consumers and if the beneficiary cannot be identified, to deposit it in a welfare fund. The Authority is empowered to levy penalty on the registered person and take further deterrent measures. One such order passed by the Authority against the Petitioner is the subject of challenge in this Petition.

(3.) The Petitioner No1-Hardcastle Restaurants is a private limited company. The Petitioner no.2 is the director. For convenience, they are referred in singular. Petitioner operates quickservice restaurants under the brand name McDonald's in Western and Southern India. The Petitioner serves around 2320 types of food and beverages items from its restaurants. The Petitioner is registered under the Goods and Services Tax Act, 2017 in ten States. After the commencement of GST Act till 14 November 2017, the services rendered by the Petitioner were subjected to 18% of GST. A notification was issued on 14 November 2017 reducing the rate of GST to 5% with effect from 15 November 2017. As a result, the Petitioner had to charge GST at 5% on the services rendered without availing impugned tax credit of the taxes paid on input, input services and capital goods.