Priyanka Sambhav
Next time when you visit a Starbucks for a cup of coffee, you may find the prices of coffee a bit more affordable. And No Tata-Starbuck is not doing this to serve you pocket-friendly cuppa but has been asked to reduce the costs by the National Anti Profiteering Authority (NAA).
Starbucks has been asked to pay a fine of Rs 1.04 crore by the NAA for not passing the GST rate cut benefit to its consumers. The coffee outlet has to pay within 3 months, with 18% interest from the day the profiteered amount was collected. Starbucks has to deposit the amount to central and state consumer welfare funds. The investigation was conducted by the Director-General of NAA for the 1 November 2017 to 30 June 2018 period. The complaint was filed by a consumer alleging that the coffee outlet did not pass on the benefit of the GST rate cut on restaurant service. GST was reduced from 18% to 5% for restaurant services from 15 November 2017, but the coffee chain instead of lowering the price increased the price of its ‘short cappuccino’ from Rs 155 to Rs 170.
The NAA order said, “ the company increased the base prices of food items and applied 5% GST thereon, either maintaining the pre-rate reduction selling prices or even increasing them and which qualifies for profiteering.”
You should know that Starbucks in India is a 50:50 joint venture between Tata Consumer Products and Starbucks Corporation that operates Starbucks Coffee outlets.
