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Jubilant FoodWorks Shares Fall After Being Found Guilty Of Illegal GST Gains

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Jubilant FoodWorks, the operator of quick-service restaurant chain Dominos Pizza in India, was found guilty of failing to pass on the GST benefit worth Rs 41.42 crore on the sale of some products. The NAA has directed the operator to deposit these illegal gains with the government.

Jubilant FoodWorks Shares Fall After Being Found Guilty Of Illegal GST Gains
 

The National Anti-Profiteering Authority (NAA) had received an email complaint from a customer saying that Jubilant FoodWorks had not reduced the prices of 'Dominos Stuffed Garlic Bread' and 'Medium Veg Pizza' despite a GST rate cut from 18 percent to 5 percent. This new rate cut to 5 percent without Input Tax Credit (ITC) from 18 percent with ITC was effective from 15 November 2017. NAA held that Jubilant FoodWorks has not passed on the benefit of reduction in the rate of tax to its customers during the period 15 November 2017 to 31 May 2018 and the quantum of profiteered amount illegally earned by it is over Rs 41 crore.

Apart from ordering the operator to refund to the complainant an amount of Rs 5.65 along with interest at the rate of 18 percent from the date of purchase, Jubilant FoodWorks has to "deposit the balance amount of Rs 41,42,97,629.25 in the ratio of 50:50 in the Central and the State Consumer Welfare Funds along with interest @18 percent till the same is deposited, within a period of 3 months," the NAA said.

The operator has 1,128 'Dominos Pizza' outlets in 31 states and union territories.

Share price of Jubilant FoodWorks touched an intraday low of Rs 1,322.50 apiece after a more than 4 percent fall from the previous day's close.

Read more about: jubilant foodworks
Story first published: Tuesday, February 5, 2019, 10:59 [IST]
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