{"id":8131,"date":"2026-02-25T17:40:05","date_gmt":"2026-02-25T12:10:05","guid":{"rendered":"https:\/\/www.centaxonline.com\/blog\/?p=8131"},"modified":"2026-02-25T17:40:05","modified_gmt":"2026-02-25T12:10:05","slug":"gstat-upholds-profiteering-for-not-passing-gst-rate-cut-benefit","status":"publish","type":"post","link":"https:\/\/www.centaxonline.com\/blog\/gstat-upholds-profiteering-for-not-passing-gst-rate-cut-benefit","title":{"rendered":"GSTAT Upholds Profiteering for Not Passing GST Rate Cut Benefit"},"content":{"rendered":"<pre><strong>Case Details: <a href=\"https:\/\/www.centaxonline.com\/latest-news-updates\/gst\/101010000000416722\/profiteering-upheld-as-price-hike-post-gst-rate-cut-lacked-justification-benefit-not-passed-to-consumers-gstat\">DG Anti Profiteering, Director General Of Antiprofiteering, DGAP vs. A.J. Enterprises (2026) 39 Centax 361 (Tri.-GST-Delhi)<\/a><\/strong><\/pre>\n<h2><em>Judiciary and Counsel Details<\/em><\/h2>\n<ul>\n<li><strong>Shri Mayank Kumar Jain<\/strong>, Member (J)<\/li>\n<\/ul>\n<h2><em>Facts of the Case<\/em><\/h2>\n<p>The respondent-assessee was engaged in supplying restaurant services, and proceedings were initiated under section 171 of the CGST Act, alleging that the benefit of a reduction in the GST rate was not passed on to consumers. An investigation was conducted by the Director General of Anti-Profiteering (DGAP), pursuant to which the department issued a notice stating that the base prices of products had been increased while maintaining the same maximum retail price (MRP) that existed prior to the rate reduction. The department contended that such conduct demonstrated that the benefit of the tax rate reduction had not been passed on to consumers by way of a commensurate reduction in prices. The assessee submitted that the increase in base prices was attributable to higher royalty payments, advertisement contributions, lease rentals and commissions payable to online aggregators. The matter was accordingly placed before the GST Appellate Tribunal (GSTAT).<\/p>\n<h2><em>GSTAT Held<\/em><\/h2>\n<p>The GSTAT held that the justification advanced by the assessee for increasing the base prices was not supported by cogent evidence on record. It was observed that the respondent had willfully increased the base prices of the products in order to maintain the same MRP that prevailed prior to the reduction in the GST rate. The tribunal noted that such conduct resulted in the denial of the intended benefit of tax rate reduction to consumers and therefore amounted to profiteering within the meaning of section 171 of the CGST Act. Accordingly, it was concluded that the respondent had indulged in profiteering, and the profiteered amount, along with applicable interest, was directed to be deposited in the Central and State Consumer Welfare Fund.<\/p>\n<h2><em>List of Cases Cited<\/em><\/h2>\n<ul>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=(2025)%2035%20Centax%2077%20(Tri.%20-%20GST%20-%20Delhi)&amp;itemType=AP\">DGAP v. Proctor &amp; Gamble Group<\/a> \u2014 (2025) 35 Centax 77 (Tri. &#8211; GST &#8211; Delhi) \u2014 Referred [Para 28]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=(2025)%2034%20Centax%2072%20(Tri.%20-%20GST%20-%20Delhi)&amp;itemType=AP\">DGAP v. Urban Essence (Subway Franchisee)<\/a> \u2014 (2025) 34 Centax 72 (Tri. &#8211; GST &#8211; Delhi) \u2014 Referred [Para 48]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2018%20(13)%20G.S.T.L.%20412%20(N.A.P.A.)&amp;itemType=AP\">Kumar Gandharv v. KRBL Ltd.<\/a> \u2014 2018 (13) G.S.T.L. 412 (N.A.P.A.) \u2014 Referred [Para 27]<\/li>\n<li>Nestle India Ltd. v. Union of India \u2014 [2020] 114 taxmann.com 488 (Delhi) = 2020 80 GST 369 (Delhi) \u2014 Referred [Para 39]<\/li>\n<li>P.T. Rajan v. T.P.M. Sahir \u2014 (2003) 8 SSC 498 \u2014 Referred [Para 30]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=(2024)%2014%20Centax%20374%20(Del.)&amp;itemType=AP\">Reckitt Benckiser India (P.) Ltd. v. Union of India<\/a> \u2014 (2024) 14 Centax 374 (Del.) = 2024 (82) G.S.T.L. 344 (Del.) \u2014 Referred [Para 40]<\/li>\n<\/ul>\n<h2><em>List of Notifications Cited<\/em><\/h2>\n<ul>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=Notification%20No.%2046%2F2017-Central%20Tax%20(Rate)&amp;itemType=AP\">Notification No. 46\/2017-Central Tax (Rate)<\/a> dated 14.11.2017<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=Notification%20No.%2031%2F2019-Central%20Tax&amp;itemType=AP\">Notification No. 31\/2019-Central Tax<\/a>, dated 28.06.2019<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=Notification%20No.%2018%2F2024-Central%20Tax&amp;itemType=AP\">Notification No. 18\/2024-Central Tax<\/a> dated 30.09.2024<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Case Details: DG Anti Profiteering, Director General Of Antiprofiteering, DGAP vs. A.J.&hellip;<\/p>\n","protected":false},"author":19,"featured_media":8144,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37,60,189],"tags":[],"class_list":["post-8131","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-gst","category-news","category-gst-case-chronicles"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>GSTAT Upholds Profiteering for Not Passing GST Rate Cut Benefit<\/title>\n<meta name=\"description\" content=\"GSTAT holds restaurant liable for profiteering as GST rate cut benefit not passed to consumers; 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