Dominos pizza maker or Jubilant Foodworks, as it is known in the corporate world, is looking all stale and cold today, making it unpalatable. The stock price fell over 2.5% to Rs.1323.90 and pretty much remains in the deep red zone.
The National Anti-Profiteering Authority has found the company guilty of not passing on the GST cut benefit of Rs 41.42 crore on sale of some products. The company has been directed to deposit the illegal gains with the government, saying it has not passed on the benefit from 15th Nov 2017 to 31st May, 2018.
This action was taken after a customer filed a complaint that Jubilant had not reduced prices of its “Stuffed garlic bread” and “Medium Veg Pizza” despite GST coming down from 18% to 5%.
The company says, “Jubilant FoodWorks unreservedly supported the reduction of GST on restaurants to 5%, as we believed it to be an extremely progressive and growth-enabling measure. In the absence of any explicit rules and guidelines, we followed the spirit of the law and passed on the benefits of GST reduction to our customers with immediate effect. We would like to assert that the loss to the company due to Input Credit withdrawal was far higher than the price increase that was taken, and this wasn't taken into account by the NAA. We are studying the order in detail and will be exploring all possible options for the future.”