New Delhi: Hardcastle Restaurants, a franchisee of popular fast-food chain McDonald’s, was on Sunday found guilty of overcharging customers by not passing on GST rate cut benefits over Rs 7.49 crore. The National Anti-Profiteering Authority (NAA) ordered the franchisee to reduce prices of its products commensurately in respect of which profiteering had been computed, keeping in view the reduced rate of tax and the benefit of ITC which has been availed. Also Read - Caught on Camera: Delivery Driver Cancels Food Order & Eats it Outside Customer's House | Watch
Hardcastle Restaurants was operating quick-service restaurants under the brand name McDonald’s in the western and southern regions of India. Also Read - UK Man Travels 160 kms Amid Lockdown Just 'for a McDonald's', Fined
In its final order on the matter given on December 9, the NAA has held that Hardcastle Restaurants had resorted to profiteering by charging more price for some of its products even though GST on it reduced from 18 per cent of 5 per cent without input tax credit (ITC) with effect from November 15, 2017. Also Read - Russian Man Books Rs 2 Lakh Helicopter Ride Just Because He Wanted to Eat a McDonald's Burger
It also directed the McDonald’s franchisee to deposit 50 per cent of the profiteered amount of Rs 7.49 crore in the Central Consumer Welfare Fund and balance 50 per cent on consumer welfare funds of 10 states where supplies by Hardcastle resulted in profiteering. The deposits will also attract 18 per cent interest rate applicable from the date from which a higher amount was realised by the respondent despite tax cuts and will have to be deposited within a period of three months.
NAA said that though the offence attracted penalty, the same would not be applicable in this case as the penalty provisions have been inserted into CGST Act, 2017 with effect from January 1, 2020, and was not in operation between November 15, 2017, and January 31, 2018, where the violation took place.
(With IANS inputs)