DG Anti Profiteering Vs C.G. Foods (GSTAT)
The Goods and Services Tax Appellate Tribunal examined proceedings arising from an investigation conducted by the Director General of Anti-Profiteering (DGAP) under Section 171 of the Central Goods and Services Tax Act, 2017. The investigation followed a complaint alleging that the supplier of instant noodles falling under HSN 1902 failed to pass on the benefit of a GST rate reduction from 18% to 12% notified with effect from 15.11.2017.
Pursuant to a reference by the Standing Committee on Anti-Profiteering, the DGAP initiated investigation proceedings by issuing notice to the respondent, calling upon it to explain whether the benefit of tax reduction had been passed on by way of commensurate price reduction. The investigation period covered supplies made from 15.11.2017 to 31.12.2018. Due to delays in submission of information, the investigation timeline was extended, and the final report was issued on 01.09.2025. The Tribunal noted that the extended timeline was valid in light of judicial precedents holding that such time limits are directory in nature.
The respondent submitted that it followed a consistent internal pricing policy with price revisions ordinarily undertaken twice a year. It contended that extraordinary increases in raw material prices, packaging costs, and transportation expenses necessitated an off-cycle price revision around the time of the GST rate change. It was further argued that despite earlier GST rate increases, the maximum retail price had not been increased due to competitive pressures, and that the subsequent 6% GST reduction provided only marginal relief compared to significant cost escalations.
