GST arm DGAP finds Tata Starbucks guilty of profiteering 4.51 crores

New Delhi: The GST investigative arm has found Tata Starbucks guilty of profiteering to the tune of Rs 4.51 crore by not reducing prices of coffee despite a cut in the rate.

Investigation by the Directorate General of Anti Profiteering (DGAP) has revealed that Tata Starbucks, the equal joint venture between the Tata and global coffee chain Starbucks, had hiked the base price of one its coffee variant after the GST Council cut tax rates on restaurants from 18 per cent to 5 per cent with effect from November 15, 2017.

This kept the retail sale price of the product pre and post GST rate reduction intact. Sources said the DGAP has concluded its investigation in March and found that Starbucks profiteered Rs 4.51 crore.

This case will be now heard by the National Anti-Profiteering Authority (NAA), which will pass the final order about the quantum of profiteering.

When contacted, Tata Starbucks spokesperson said: "As a responsible organization, Tata Starbucks conducts its business ethically and complies with all the local laws and regulations".

The company, since its entry in October 2012, operates around 140 outlets across Mumbai, Delhi-NCR, Hyderabad, Chennai, Bengaluru, Chandigarh, Pune and Kolkata.