Profiteering case: Subway Systems gets relief from NAA

The National Anti-profiteering Authority (NAA) has agreed to remove the name of Subway Systems India Pvt Ltd, the licensee of the Subway brand in the country, in a case against the company’s franchisee Dough Makers India Pvt Ltd, an NAA counsel told the Delhi High Court.

This may set a precedent for cases where a franchiser is named as a respondent in a case against its franchisee.

Subway Systems counsel Abhishek Rastogi said the move will provide huge relief to franchisers which are not part of transactions between the franchisee and their customers but have been dragged in the investigation process.

He said anti-profiteering provisions clearly provide that the benefit of GST rate cuts has to be passed on to the recipient of supply and accordingly transaction must be seen only between the franchisee and the receiver of supply, thereby removing the burden of profiteering from the suppliers up in the supply chain.