Urban Essence, a franchisee of Subway, has been ordered to deposit Rs 5,45,005 plus 18% interest into the Consumer Welfare Funds (CWF) of the Central and Maharashtra governments within three months.
This directive came after the GST Appellate Tribunal (GSTAT) confirmed an anti-profiteering order against the company. The case involved allegations that Urban Essence failed to pass on the benefit of a GST rate reduction on restaurant services.
The GST rate for restaurant services was reduced from 18% to 5% effective from November 15, 2017. However, an investigation by the Director General of Anti-Profiteering (DGAP) found that Urban Essence had increased the base prices of its menu items, resulting in the cum-tax price paid by consumers not being reduced commensurately with the GST rate cut. The investigation period was from November 15, 2017, to October 31, 2019.
The GSTAT’s final order, issued on August 5, 2025, determined that Urban Essence had profiteered by not reducing its selling prices. As a result, the company was directed to return the amount of Rs 5,45,005 along with 18% interest from the date of collection (November 15, 2017).
The final order was issued in Delhi, where the GSTAT’s Principal Bench is located, and was signed by Manmohan Sharma, a Stenographer/Law researcher for the Delhi (PB) jurisdiction.
