Starbucks found Guilty of Profiteered Rs. 4.51 cr. from Customers
In an investigation conducted by Director General of Anti- profiteering (DGAP) has found that Tata Starbucks profiteered by not passing on the Goods and Service Tax (GST) cuts to customers.
The coffee chain, a joint venture between Tata and Starbucks, was investigated by the anti-profiteering agency over allegation of profiteering from the consumers.
Director General of Anti- profiteering (DGAP) has revealed that Tata Starbucks, the equal three way partnership between the Tata and international espresso chain Starbucks, had hiked the bottom value of 1 its espresso variant after the GST Council minimize tax charges on eating places from 18 per cent to five per cent with impact from November 15, 2017.
According to the sources, DGAP has concluded its investigation in March and located that Starbucks profiteered Rs 4.51 crore.
The DGAP submitted its report to National Antiprofiteering Authority (NAA) recently. The case is now being heard by the NAA for a final decision.
The investigation started after a customer complained to the anti-profiteering authorities that the coffee chain had not reduced the price of its product despite a reduction in the GST rate from 18% to 5%.
Following that, restaurants were supposed to adjust their base price after taking into account the unavailability of credit on input. However, there have been complaints from customers that restaurants have hiked their base price of the products in such a way that the final sale price remained the same both pre and post GST rate cut.
After finding out the books of accounts of an organization, the DGAP provides its report back to the NAA for additional motion. If the NAA finds a agency responsible of profiteering then the quantity profiteered must be refunded to shoppers by the corporate.
Source: ET
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