The Goods and Services Tax Appellate Tribunal (GSTAT) has confirmed that Tata Play Limited profiteered to the tune of ₹450.18 crore by charging identical subscription rates before and after the implementation of GST, thereby failing to pass on the benefit of input tax credit to consumers.

The order was passed by a Bench comprising Justice (Retd.) Dr. Sanjaya Kumar Mishra, President, and A. Venu Prasad, Member (Technical) while deciding proceedings arising from an investigation conducted by the Director General of Anti-Profiteering (DGAP).

The case originated from a complaint alleging that Tata Play had not passed on the benefits arising from GST, particularly the additional input tax credit (ITC) available under the new tax regime.

Following the complaint, the Standing Committee on Anti-Profiteering referred the matter to the DGAP for detailed investigation under Rule 129 of the CGST Rules.

The DGAP examined the pricing structure of Tata Play’s subscription services for the period 1 July 2017 to 31 January 2019, analysing pre-GST and post-GST cost structures, tax incidence, and pricing data.

In its report dated 5 August 2021, the DGAP concluded that Tata Play had maintained the same subscription prices even after GST came into force, despite receiving the benefit of additional ITC. According to the investigation, this resulted in profiteering amounting to ₹450.18 crore.

The GSTAT observed that Section 171 of the Central Goods and Services Tax (CGST) Act mandates that any benefit arising from reduction in tax rates or availability of input tax credit must be passed on to consumers through commensurate reduction in prices.

After examining the DGAP’s report and submissions made by the company, the Tribunal held that the methodology adopted for calculating profiteering was justified and supported by the evidence on record.

The Bench noted that charging identical subscription rates in the pre-GST and post-GST regimes, despite the availability of additional ITC, effectively resulted in retention of tax benefits that should have been transferred to subscribers.

Accordingly, the Tribunal upheld the determination that Tata Play had profiteered ₹450.18 crore.

The Tribunal directed that the profiteered amount of ₹450.18 crore be deposited into the Consumer Welfare Funds (CWF) of the Centre and the respective States.

It further ordered that the amount shall carry interest at the rate of 18% per annum, calculated from the date the profiteered amount was collected from customers until the date of its deposit.

The Tribunal also observed that in cases where the identity of individual consumers cannot be determined, the law requires that the amount be deposited into the Consumer Welfare Funds.

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