In November, the GST Council cut tax rates for all restaurants, except the ones located within hotels.(Reuters)

The Directorate General of Safeguards (DGS) has slapped a profiteering notice on Jubilant FoodWorks for allegedly not passing on GST rate cut benefit to consumers at its Dominos Pizza outlets. A standing committee had referred the matter to DGS which in turn issued notice to Jubilant FoodWorks seeking response on whether the benefit of tax rate reduction in November last was passed on to consumers, a source said. As per the structure of the anti-profiteering mechanism in the GST regime, complaints of local nature will be first sent to the state-level ‘screening committee’, while those of national level will be marked for the ‘standing committee’.

“There were complaints from two consumers to the standing committee regarding over-charging by Dominos Pizza even after the GST rate was cut to 5 per cent from 18 per cent,” the source told PTI. In an e-mailed response to queries sent by PTI, Jubilant FoodWorks said:”We are in a silent period now, we would not be (able) to participate in any story.”

In November, the GST Council cut tax rates for all restaurants, except the ones located within hotels with room tariffs of Rs 7,500 and above, to 5 per cent. Prior to reduction, GST was 18 per cent for air-conditioned restaurants and 12 per cent for non-air-conditioned restaurants.

The source further said the notice to Jubilant FoodWorks is one of the 15 profiteering notices sent by DGS so far since the rollout of GST on July 1. As part of its investigation, DGS asks the company to submit any document it wants to to defend its case. “Jubilant FoodWorks has replied to the notice in its defence. We are analysing the response and if required further queries would be raised,” the source added.

After studying the documents, DGS gives its report to the Anti-Profiteering Authority for further action, which may include fine and extreme penalty like cancellation of registration.If the complaints have merit, the respective committees would refer the cases for further investigation to DGS.

DGS is mandated to complete its investigation within 3 months, and may seek an extension of further 3 months from the standing committee.