Anti-profiteering: Rs. 3.67 crore profiteering confirmed against home retail company for not passing on benefit of GST rate reduction; complaint withdrawal does not end proceedings: GSTAT Principal Bench

The Tribunal held that Section 171 casts a statutory obligation that does not depend on proving wilful retention; the customised nature of supplies does not exclude them from anti-profiteering examination; and proceedings under Section 171 are not a private dispute that ceases upon withdrawal of the complaint.

The GSTAT Principal Bench, New Delhi, has confirmed anti-profiteering of Rs. 3,67,88,027 against a home retail company for the period November 2017 to September 2019, holding that the respondent failed to pass on the benefit arising from the reduction in the GST rate from 28% to 18% on modular kitchen components and other retail products by way of commensurate reduction in prices [DGAP v. Praxis Home Retail Ltd].

The Bench of Justice Mayank Kumar Jain (Judicial Member) and A. Venu Prasad (Technical Member) addressed six issues, including whether the demerger of Future Retail Ltd's business into the respondent affected the applicability of Section 171, whether the DGAP exceeded its jurisdiction by examining products beyond the complaint, and whether the methodology adopted for customised lump-sum supplies was sustainable.

Relying upon the Delhi High Court's ruling in Reckitt Benckiser India Pvt. Ltd. v. Union of India, the Tribunal held that no fixed mathematical formula can be prescribed for determining profiteering — the determination must be fair, reasonable, and responsive to the peculiarities of the case. The DGAP's methodology of comparing channel-wise average pre-rate-reduction base prices with actual post-rate-reduction invoice prices was found to be a permissible basis.

The Tribunal rejected the contention that the complainant's withdrawal ended the proceedings, holding that proceedings under Section 171 are not a private dispute — the obligation to pass on the benefit is statutory. It also held that proof of wilful retention is not a precondition under Section 171(1), and that general assertions of commercial factors without transaction-specific evidence cannot displace the invoice-wise computation. No penalty was imposed as the profiteering period predated the insertion of Section 171(3A).

2026-juristway.com-2974-GSTAT(New Delhi-[PB])-GST  |  GSTAT, Principal Bench, New Delhi  |  NAPA/20/PB/2025  |  14.10.2026