Jubilant FoodWorks, the operator of Dominos Pizza chain in India, has been found guilty of not passing on GST-cut benefit of ₹41.42 crore on sale of some pizza products and has been directed to deposit the illegal gains with the government.

The National Anti-Profiteering Authority (NAA) passed the order on an email complaint filed by a customer that Jubilant FoodWorks had not reduced the prices of ‘Dominos Stuffed Garlic Bread’ and ‘Medium Veg Pizza’ despite a cut in GST rate from 18 per cent to 5 per cent.

The Goods and Services Tax (GST) rate on restaurants was cut to 5 per cent without Input Tax Credit (ITC) from 18 per cent with ITC, with effect from November 15, 2017.

The NAA held that Jubilant FoodWorks has not passed on the benefit of reduction in the rate of tax to its customers during the period November 15, 2017 to May 31, 2018.

“The respondent (Jubilant FoodWorks) is directed to refund to the applicant an amount of ₹5.65 along with interest @18 per cent from the date of charging the above amount from him till its refund. He is further directed to deposit the balance amount of ₹41,42,97,629.25 in the ratio of 50:50 in the Central and the State Consumer Welfare Funds along with interest @18 per cent till the same is deposited, within a period of three months,” the NAA said.

The NAA also asked the Directorate General of Anti-Profiteering (DGAP), which investigated the case, to conduct further investigation post May 31, 2018, to check if the benefit of tax reduction was passed to customers.

The authority has also issued a show-cause notice to Jubilant FoodWorks to explain why penalty should not be imposed on the company.