Profiteering Notice To Jubilant FoodWorks On Domino’s Pizza Pricing

The Directorate General of Safeguards has slapped a profiteering notice on Jubilant FoodWorks Ltd. for allegedly not passing on the Goods and Services Tax rate cut benefit to consumers at its Domino's Pizza outlets.

A standing committee had referred the matter to DGS which in turn issued a notice to Jubilant FoodWorks seeking response on whether the benefit of tax rate reduction in November last year, was passed on to consumers or not, a person familiar with the development 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 overcharging by Domino's Pizza even after the GST rate was cut to 5 percent from 18 percent before, the source said.

Also Read: Jubilant FoodWorks' Profit Triples As Same-Store Sales Surge

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 percent. Prior to reduction, GST was fixed at 18 percent for air-conditioned restaurants and 12 percent for non-air-conditioned restaurants.

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, the person quoted above said.

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 person 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 three months, and may seek an extension of further three months from the standing committee.