Lifestyle International kept GST‑inclusive prices unchanged after tax cut: GSTAT confirms profiteering of ₹13.61 cr [Read Order]

In a recent ruling, the GST Appellate Tribunal (GSTAT) has upheld findings against Lifestyle International Pvt. Ltd., ruling that the company profiteered by charging the same GST‑inclusive prices even after the GST rate on FMCG goods was reduced from 28% to 18% between November 2017 and January 2018.

A consumer complaint indicated that Lifestyle sold the Maybelline Fit Me Foundation at the same price after the cut. DGAP’s investigation revealed that Lifestyle increased base prices to neutralise the lower tax, so customers paid no less.

The Director General of Anti‑Profiteering (DGAP) investigated and initially found ₹15.37 crore profiteering.

After re‑investigation ordered by the erstwhile National Anti‑Profiteering Authority (NAA), the figure was revised to ₹13.61 crore, covering 25.97 lakh transactions across 23 States and UTs.

Lifestyle had argued that after Notification 24/2022‑CT (23 Nov 2022) deleted Rules 122, 124, 125, 134 and 137, relating to constitution and tenure of the NAA, the authority ceased to exist, rendering subsequent actions void. The company relied on Kolhapur Canesugar Works v. Union of India and Shree Bhagwati Steel Rolling Mills v. CCE to claim that repeal without savings obliterates the rule as if it never existed.

The respondent pleaded that the proceedings were non‑est; Section 6 of the General Clauses Act does not apply to rules, and hence investigations post‑omission were invalid.

On the other hand, DGAPs responded that the omission affected only administrative provisions; substantive powers under Section 171 and Rule 133 remained intact. The DGAP stated that Lifestyle itself had invited further investigation by admitting that ₹1.98 crore might not have been passed on to customers.

The Bench, comprising President  Sanjaya Kumar Mishra and technical member Anil Kumar Gupta, observed that Rule 133(4) and (5) authorise the Authority to order further inquiry and that these provisions were unaffected by the 2022 omission. It held that the deletion of structural rules did not repeal the substantive anti‑profiteering mechanism.

Citing Reckitt Benckiser (Delhi HC, paras 159‑161), the Tribunal reiterated that expansion of investigation beyond the original complaint is not ultra vires.

Concluding that the NAA’s directions and DGAP’s subsequent investigation were lawful and valid, the GSTAT rejected Lifestyle’s jurisdictional objection and confirmed the profiteering demand.

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