Hyderabad: Two Hyderabad cinemas have been directed to deposit ₹11 lakh, along with 18% annual interest, in consumer welfare funds for failing to pass on a GST reduction to moviegoers while keeping ticket prices unchanged.In separate orders pronounced on Sept 19, GST Appellate Tribunal judicial member Justice Mayank Kumar Jain upheld the director general of Anti-Profiteering’s findings against Alankar Cinema, Langar House, and Devi 70MM, Chikkadapally.The cases concerned the reduction in GST from 18% to 12% on cinema tickets priced at ₹100 or less, effective Jan 1, 2019. The tribunal held that pricing discretion could not override the obligation under Section 171 of the CGST Act to pass on tax reductions.Price ceilings no exemptionAlankar Cinema retained tax-inclusive ticket prices of ₹100, ₹60 and ₹30 by increasing base prices. Its balcony ticket’s base price, for instance, rose from ₹84.7 to ₹89.2. DGAP computed profiteering of ₹10.1 lakh between Jan 1 and Oct 31, 2019.The theatre cited state govt and high court orders regulating prices, rising electricity, security and maintenance costs, and pending requests for price revisions. It also argued that it sold no physical goods, issued no invoices and retained no input tax credit benefit.Rejecting these objections, the tribunal held that state-prescribed price ceilings did not exempt suppliers from passing on tax cuts.Commercial factors no defenceDevi 70MM retained ₹80 and ₹50 ticket prices by raising base prices. No profiteering was computed for its ₹118 balcony tickets. Following the theatre’s voluntary price reduction during March 11–May 8, 2019, the investigation was restricted to Jan 1–March 10, yielding ₹81,722 in profiteering, inclusive of GST.The theatre denied retaining tax benefits and cited film popularity, star cast, weekends and holidays as pricing factors. The tribunal rejected these grounds.Each theatre must deposit half its amount, with interest, in the Central Consumer Welfare Fund and half in Telangana’s fund. Neither was penalised. In Alankar’s case, the tribunal held that Section 171(3A), effective Jan 1, 2020, could not apply retrospectively to 2019.
