Starbucks found guilty of not passing GST cut benefits to consumers

Starbucks found guilty of not passing GST cut benefits to consumers

New Delhi, November 6, 2020

The National Anti-profiteering Authority (NAA) has found Starbucks guilty of profiteering as it did not transfer the benefits of lower GST rates to the consumers.

Investigation by the Director General of Anti-Profiteering (DGAP) showed that the company profiteered a total of over Rs 1.04 crore as it did not pass on the benefits of GST being lowered from 18 per cent to 5 per cent, starting November 15, 2017.

The amount was profiteered during November 15, 2017 to June 30, 2018.

The NAA has directed the company to pass on the benefits of tax cut to the customers.

"The respondent is also directed to deposit the profiteered amount mentioned along with the interest to be calculated at 18 per cent from the date from which the above amount was collected by him from the recipients till the above amount is deposited," the NAA order said.

The amount has to be deposited within three weeks of the order with the Consumer Welfare Funds of the Central and the concerned state governments where the profiteering took place.

As per the complaint, based on which the investigation was done, the coffee chain increased the price of its "short cappuccino" from Rs 155 to Rs 170, when the GST rate reduction came into effect.


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