No Retrospective Application of Amendment Mandating 18% Interest on Profiteered Amount: GSTAT Upholds DGAP’s Findings, Directs Deposit of ₹4.57 Lakh [Read Order]
The Tribunal clarified that the amendment cannot be applicable retrospectively, prior to its commencement date
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..
In an appeal initiated by the DGAP, the authority had initially alleged profiteering of ₹28.74 lakh based on its 2021 report. Following a remand by the erstwhile National Anti-Profiteering Authority (NAA) in 2022 for fresh verification under Rule 133(4) of the CGST Rules, the DGAP filed a subsequent report reaffirming the quantum. Upon further scrutiny, however, the final report dated November 20, 2025, determined profiteering to the extent of ₹4,57,683 for the period from November 15, 2017, to June 30, 2019.
The respondent accepted the profiteering figure but contested the imposition of interest and penalty. It relied on a recent Tribunal decision in DGAP v. Procter & Gamble Group, wherein it was held that the amendment to Rule 133(3)(c), which mandated for interest at 18% on the profiteered amount, was not retrospective.
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 Tribunal 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.
The Tribunal held that the respondent could not be required to pay interest under Rule 133(3)(c) as the investigation period ended in June 2019. Similarly, the penalty provision inserted in 2020 was found inapplicable, as the alleged profiteering occurred well before its introduction.
With no dispute remaining on the quantum of profiteering and no statutory basis for additional liabilities, the case was disposed of. The jurisdictional Commissioner has been directed to report compliance within four months.
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