GSTAT Anti-profiteering Annual Case Digest: Key Decisions of 2025

GST Rate Cut Benefits Not Passed On: GSTAT Orders Subway Franchisee to Pay Profiteered ₹5.45 Lakh to Consumer Welfare Fund

DGAP vs URBAN ESSENCE (SUBWAY FRANCHISEE) CITATION : 2025 TAXSCAN (GSTAT) 101

The Principal Bench of the Goods and Services Tax Appellate Tribunal (GSTAT), New Delhi recently upheld the findings of the Director General of Anti-Profiteering (DGAP) against M/s Urban Essence had profiteered ₹5,47,005 by failing to pass on the benefit of a GST rate reduction to its customers.

The proceedings originated from a complaint regarding a single product sold by the franchisee, following which the DGAP initiated an investigation under Section 171 of the CGST Act, 2017. Citing Rule 129(2) of the CGST Rules, the DGAP expanded the scope to cover all 340 products sold during the investigation period from November 15, 2017 to October 31, 2019.

President, Dr. Sanjaya Kumar Mishra held that Section 171 of the CGST Act mandates passing on the benefit of any tax rate reduction through a commensurate reduction in prices and that the scope of investigation extends to all products supplied by the registered entity.

As the profiteering period fell prior to the insertion of Section 171(3A) on January 1, 2020, no penalty was imposed on the respondent.

GSTAT Holds Distributor of L’Oréal India Products Guilty for Not Passing GST Rate-Cut Benefits to Consumers

DGAP vs RAJ & CO. CITATION : 2025 TAXSCAN (GSTAT) 102

The Principal Delhi Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) ruled that Raj & Co., a distributor of L’Oréal India, was guilty of profiteering by not passing on the benefit of the reduction in GST rates to its customers.

The bench comprising Justice (Retd.) Dr. Sanjaya Kumar Mishra observed that there was a clear reduction in GST rates and no commensurate reduction in prices by the respondent. It explained that Section 171 of the CGST Act creates a statutory obligation on each supplier to pass on tax benefits, and the respondent’s reliance on software or L’Oréal’s actions did not absolve its duty.

The tribunal pointed out that similar arguments had already been rejected in earlier proceedings and that the respondent had discretion to reduce prices or offer discounts but chose not to do so.

Procter & Gamble Not Liable to Pay 18% Interest on Profiteered Amount as it Happened in 2018: GSTAT

DGAP vs PROCTOR & GAMBLE GROUP CITATION : 2025 TAXSCAN (GSTAT) 103

In a recent ruling, the Delhi Bench of the Goods and Services Tax Appellate Tribunal held that Procter & Gamble is not liable to pay 18% interest on the profiteered amount since the profiteering occurred in 2018, before the amendment introducing such liability came into effect.

The tribunal explained that laws imposing a new liability are presumed to be prospective unless the statute clearly provides otherwise. The tribunal pointed out that the profiteering in this case took place prior to 28 June 2019.

The provision for 18 percent interest was not applicable. It accepted the DGAP’s finding of profiteering to the extent of Rs. 6,88,770 but ruled that no interest or penalty would apply. The tribunal directed Procter & Gamble to deposit the profiteered amount in the Consumer Welfare Funds of the Centre and States equally.

Nirma Ltd Cleared of Profiteering Charges: GSTAT confirms No Contravention of S. 171(1) GST Act, Accepts Report of DGAP

DGAP vs NIRMA LTD CITATION : 2025 TAXSCAN (GSTAT) 104

The GST Appellate Tribunal ( GSTAT ), Principal Bench, New Delhi, has upheld the findings of the Directorate General of Anti-Profiteering ( DGAP ), confirming that Nirma Ltd did not violate the provisions of Section 171(1) of the Goods and Services Tax ( GST ) Act, 2017 relating to profiteering.

After thorough re-investigation, the DGAP once again concluded in its report dated 23 May 2025, that no contravention of Section 171(1) had occurred, clearing Nirma Ltd of profiteering allegations for the third time.

Justice (Retd.) Mayank Kumar Jain observed that the DGAP’s findings were consistent and well-supported across all stages of inquiry. The Tribunal held that the DGAP’s final report deserved to be accepted and confirmed that Nirma Ltd had not failed to pass on any benefit of tax rate reduction to consumers.

GST Anti-Profiteering Proceedings Unsustainable Post IBC Resolution: GSTAT Sets Aside DGAP Notice u/s 171(1)

DGAP vs PUMA REALTORS PVT LTD, OREO CITY CITATION : 2025 TAXSCAN (GSTAT) 105

The GST Appellate Tribunal ( GSTAT ), Principal Bench, New Delhi, has set aside the notice issued by the Directorate General of Anti-Profiteering (DGAP), observing that anti-profiteering proceedings cannot continue once a company has undergone insolvency and its resolution plan has been approved under the Insolvency and Bankruptcy Code (IBC). DGAP conducted an investigation into alleged profiteering by Puma Realtors in relation to benefits arising from input tax credit (ITC) under the GST Act.

The GSTAT, depending on the cases precedents quoted by the counsels, concluded that any claim arising from alleged profiteering or unpassed benefits of ITC prior to the IBC resolution cannot be revived or enforced. The Tribunal noted that the approved resolution plan had no mention of anti-profiteering liabilities, meaning such claims stood legally extinguished.

Hotel Babylon Guilty of Profiteering ₹31.28 Lakh by Increasing Base Room Rates Despite GST Rate Cut: GSTAT

DGAP vs HOTEL BABYLON INN CITATION : 2025 TAXSCAN (GSTAT) 106

In a recent ruling, the Principal Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) at New Delhi held that Hotel Babylon Inn Pvt. Ltd. profiteered an amount of Rs. 31,28,631 by not passing on the benefit of Goods and Services Tax (GST) rate reduction to its customers. The Directorate General of Anti-Profiteering (DGAP) investigated the matter based on a complaint filed by the Principal Commissioner, Raipur, and found that the hotel had increased its base room prices after the rate reduction and denied the benefit of lower tax to customers.

Justice (Retd.) Dr. Sanjaya Kumar Mishra (President of GSTAT) observed that no evidence was produced by the respondent to show that the price increase was driven by market dynamics or additional expenses. The tribunal observed that the plea regarding higher costs during the COVID-19 period was an afterthought and not supported by any record. The tribunal explained that Section 171 of the CGST Act is a consumer welfare provision meant to ensure that any reduction in the tax rate or benefit of input tax credit is passed on to the final consumer.

Failure to Pass on GST Rate Reduction on Movie Tickets Amounts to Profiteering: GSTAT upholds ₹16.50 Lakh Liability

DGAP vs MALLIKARJUNA CINEMA HALL CITATION : 2025 TAXSCAN (GSTAT) 107

In a recent ruling, the Principal Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) at New Delhi held that Mallikarjuna Cinema Hall profiteered Rs. 16,50,166 by not passing on the benefit of GST rate reduction on movie tickets to consumers.

Justice (Retd.) Dr. Sanjaya Kumar Mishra (President of GSTAT) observed that the DGAP’s calculations were correct and undisputed. The tribunal pointed out that the respondent had admitted to increasing prices to earn extra profit, which was a clear case of profiteering.The tribunal explained that Section 171 ensures the benefit of tax reduction reaches consumers, and that the Telangana Government’s orders fixed only the maximum ticket prices, not mandatory rates. It further observed that the Rs. 3 maintenance charge must be taxed as part of the ticket price.

Out of 56 Buyers, 50 Received GST ITC Benefits: GSTAT Rules Supplier of Dental Equipment Did Not Profiteer ₹1.49 Crore

DGAP vs THECO INDIA PVT LTD CITATION : 2025 TAXSCAN (GSTAT) 108

In a recent ruling, the Principal Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) at New Delhi held that the supplier of dental equipment and accessories did not profiteer Rs. 1,49,81,077 as alleged by the Directorate General of Anti-Profiteering (DGAP).

Justice (Retd.) Dr. Sanjaya Kumar Mishra (President of GSTAT) observed that anti-profiteering proceedings are inquisitorial in nature, and the burden lies on the DGAP to prove profiteering through clear evidence.

The tribunal observed that the DGAP’s report itself admitted inconsistencies, as prices had increased for 158 stock-keeping units (SKUs), decreased for 316 SKUs, and remained unchanged for one. It explained that this variation did not prove that the company had profiteered. The tribunal pointed out that the DGAP had failed to show any material evidence demonstrating that the respondent had retained undue profits. It rejected the DGAP’s report and closed the proceedings, ruling that Theco India Pvt. Ltd. had duly passed on the ITC benefits to its buyers.

No Profiteering if Contractor Voluntarily Passed GST ITC Benefit to Indian Oil Corp. after Tax Reduction: GSTAT

DGAP vs GOPAL TEKNOCON PVT. LTD. CITATION : 2025 TAXSCAN (GSTAT) 109

The Principal Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) at New Delhi recently held that no anti-profiteering action is warranted when a contractor has voluntarily transferred the residual input tax credit (ITC) benefit identified by the Directorate General of Anti-Profiteering (DGAP), to the principal - here being the Indian Oil Corporation Ltd. (IOCL).

Anil Kumar Gupta (Technical Member) examined the DGAP report, the directions given by the NAA and the submissions made by the respondent to observe that the DGAP’s computation stood unchallenged and that the voluntary transfer satisfied the remedial object of anti-profiteering law.

The GSTAT noted that there would be a regulatory purpose in continuing proceedings once the benefit had been passed on and verified. Consequently, the Bench affirmed the DGAP computation and recorded that the respondent had fulfilled all of its obligations under Section 171(1).

GST Rate Cut Benefits Not Passed On: GSTAT Orders Subway Franchisee to Pay Profiteered ₹5.45 Lakh to Consumer Welfare Fund

DGAP vs URBAN ESSENCE (SUBWAY FRANCHISEE) CITATION : 2025 TAXSCAN (GSTAT) 110

The Principal Bench of the Goods and Services Tax Appellate Tribunal (GSTAT), New Delhi, has confirmed profiteering by Urban Essence, a Subway franchisee based in Pune, for failing to pass on the benefit of GST rate reduction on restaurant services from 18% to 5% with effect from 15 November 2017.

The bench of Dr Sanjaya Kumar Mishra (President) rejected these arguments. The tribunal held that Section 171 does not permit offsetting tax benefits against unrelated cost increases and that profiteering must be assessed across all supplies, not just one product.

The Bench noted that the respondent had failed to furnish adequate documentary evidence during the investigation and had not appeared for multiple hearings despite notices.

The Tribunal concluded that the respondent had indeed profiteered by not passing on the benefit of the GST rate reduction and directed the deposit of the profiteered amount with interest into the Consumer Welfare Funds under Rule 133(3)(c) of the CGST Rules, 2017.

Builder got no Additional ITC Benefit Despite Occupancy Certificate Issued Post-GST Rollout: GSTAT Clears IREO Victory Valley

DGAP vs IREO VICTORY VALLEY PVT. LTD CITATION : 2025 TAXSCAN (GSTAT) 111

The Principal Bench of the GST Appellate Tribunal (GSTAT) at New Delhi recently accepted a closure report issued by the Directorate General of Anti-Profiteering’s (DGAP) and held that the builder did not accrue any additional Input Tax Credit (ITC) benefit following the implementation of GST despite the allied occupancy certificates having been issued in September 2017.

When the matter came up before the GSTAT, a Single-Member Bench headed by Justice (Retd.) Mayank Kumar Jain, Member (Judicial) observed that the DGAP consistently found no accrual of additional ITC to the respondent in the post-GST period and that the issues raised by the NAA and CCI had been examined in subsequent reports. Accordingly, it was concluded that there was no contravention of Section 171(1) of the CGST, Act, 2017. The Tribunal thus accepted the DGAP report as a closure report and directed that the order be supplied to the respondent and concerned Commissionerates.

Anti-Profiteering Probe on ‘Eclat Serum 30gm’ Collapses as Supplier Remains Untraceable: GSTAT Drops Case

DGAP vs SHREE SUKTAM ENTERPRISE CITATION : 2025 TAXSCAN (GSTAT) 112

In a recent ruling, the Principal Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) at New Delhi held that the anti-profiteering proceedings against the respondent could not continue, as the Directorate General of Anti-Profiteering (DGAP) was unable to trace the supplier or obtain any documents needed to verify whether GST rate reduction benefits were passed on for the product “Eclat Serum 30gm.”

The tribunal observed that without any documentary evidence or confirmation that the respondent had made the relevant supplies, the investigation could not be completed. The bench pointed out that in the absence of records, it was not possible to verify whether the benefit of GST rate reduction had been passed on. It also explained that while the matter could not proceed under anti-profiteering, the jurisdictional authorities may separately examine whether the respondent had engaged in bogus billing, if such facts came to light.

No Retrospective Application of Amendment Mandating 18% Interest on Profiteered Amount: GSTAT Upholds DGAP’s Findings, Directs Deposit of ₹4.57 Lakh

DGAP vs DANGE ENTERPRISE CITATION : 2025 TAXSCAN (GSTAT) 113

The GST Appellate Tribunal has upheld the finding of profiteering under the GST Anti-Profiteering framework and directed the respondent to deposit ₹4,57,683 into the Consumer Welfare Funds of the Centre and States equally. The Tribunal accepted the revised computation by the Director General of Anti-Profiteering (DGAP) and clarified that neither interest nor penalty was leviable..

The Tribunal bench, comprising Justice (Retd.) Dr. Sanjaya Kumar Mishra, President, reiterated that the amendment, introduced via Notification No. 31/2019, could not apply to transactions prior to its notified commencement date. This is so because it created a new and onerous liability that could not be imposed retrospectively.

The bench conducted an extensive discussion on the principles of statutory interpretation, including the Supreme Court’s ruling in Vatika Township, to reaffirm that amendments imposing fresh burdens cannot be applied to past periods unless expressly stated.

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