Anti-Profiteering Case Dismissed as DGAP Consistently Found No Contravention.
Issue
Whether anti-profiteering proceedings under Section 171 of the CGST Act should be dropped when the investigating authority (DGAP), despite repeated investigations ordered by higher authorities (NAA/CCI), consistently finds that the taxpayer has not contravened the law.
Facts
- An investigation was initiated against the respondent (assessee) based on an allegation that they had not passed on the benefit of a GST rate reduction (vide Notification No. 41/2017) to their customers.
- The Directorate General of Anti-Profiteering (DGAP) conducted an investigation and concluded that the respondent had not contravened the provisions of Section 171(1).
- The National Anti-profiteering Authority (NAA) and its successor, the Competition Commission of India (CCI), were not satisfied and ordered re-investigations.
- After each re-investigation, the DGAP, having examined the facts, consistently maintained its conclusion that no profiteering had occurred.
- The DGAP filed its final report seeking acceptance of its findings.
Decision
- The authority (CCI) accepted the DGAP’s final report.
- It was held that since the investigation had been undertaken repeatedly and the DGAP had consistently concluded that there was an absence of any breach of the anti-profiteering obligation, the report deserved to be accepted.
- The proceedings against the respondent were, therefore, closed.
Key Takeaways
- DGAP’s Factual Report is Key: The investigating authority’s (DGAP) factual report is the primary basis for adjudication. When this report, even after re-investigation, finds no evidence of profiteering, it is very difficult for the adjudicating authority to hold otherwise.
- No Contravention if No Benefit: The case confirms that if the investigation determines that no benefit was actually retained by the supplier, the charge of anti-profiteering under Section 171 cannot be sustained.
- Consistency of Findings: A consistent finding of “no contravention” by the investigating body, despite multiple re-examinations, strongly supports the assessee’s case and is likely to be accepted by the final authority.
GOODS AND SERVICE TAX APPELLATE AUTHORITY, NEW DELHI
DGAP
v.
Nirma Ltd.*
Mayank Kumar Jain, Judicial Member
NAPA/108/PB/2025
OCTOBER 17, 2025
Diwakar Sharma, Inspector for the Applicant.
ORDER
1. Heard Shri Diwakar Sharma, Inspector on behalf of the DGAP.
2. Perused the record.
3. Fact giving rise to the present proceedings are that on the basis of a letter dated 18.04.2019 of the Secretary, National Anti-Profiteering Authority (NAA), Standing Committee made a reference to Directorate General of AntiProfiteering (DGAP) for conducting detailed investigation, in respect of supplies made by M/s Nirma Limited (hereinafter refers the Respondent). There was an allegation against the Respondent that it has not passed the commensurate benefit of the Reduction of tax rate to Recipient impacted vide Notification No. 41/2017 dated 14.11.2017.
4. The DGAP conducted a detailed investigation and submitted its report dated 15.12.2021.The DGAP, after investigation, concluded that the Respondent has not contravened the provisions as contained under section 171(1) of the CGST, Act, 2017.
5. The matter came up before the National Anti-profiteering Authority (NAA). The NAA vide its order dated 10.05.2022 remitted the matter to the DGAP to conduct further investigation on following issues
| (i) | Whether the Respondent has reduced, re-fixed and displayed the MRPs of the impacted SKUs commensurately w.e.f. 15.11.2017 after the rete of tax was reduced on them and conveyed the same to his Dealers i.e. Distributors / Whole Sellers / Retailers by whatever name known? |
| (ii) | Whether the Respondent has affixed stickers or stamped or online printed the reduced MRPs on the stock lying with him or his Dealers as on 15.11.2017 and thus passed on the benefit of tax reduction on it? |
| (iii) | Whether the Respondent has charged 18% GST after rate reduction on the impacted SKUs after rate reduction? |
| (iv) | On which grounds the Respondent has increased the base price of his products in the month of November, 2017 immediately after the tax reduction on 15.11.2017? |
| (v) | What evidence regarding increase in the process of Crude Oil is available on the basis of which has been it has been claimed that the Respondent has increased his pieces due to the increase in the prices of the Crude Oil?. |
| (vi) | Whether the Respondent has violated the provisions of Section 171 of the Act and if so what is the quantum of profiteering? |
6. Pursuant to the aforesaid order, The DGAP, after the investigation, submitted its report dated 27.01.2023arriving again at the conclusion that the Respondent has not contravened any provisionsas contained under section 171(1) of the CGST, Act, 2017.
7. Thereafter, the matter came up before the Competition Commission of India (CCI), the erstwhile authority having jurisdiction of the matters pertaining to Anti-profiteering.
8. The CCI vide its order dated 23.08.2024 directed the DGAP to re-investigate the matter in light of the judgment passed in Reckitt Benckiser India (P.) Ltd. v. Union of India GST 495/82 GSTL 344 (Delhi)/Writ Petition (C) No. 7743/2019 by Hon’ble High Court of Delhi, dated 29.01.2024.
9. The DGAP conducted the re-investigation pursuant to the directions given by CCI. It again arrived at the conclusion that no. of the provisions under section 171(1) of the CGST, Act, 2017 has been contravened by the Respondent.
10. w.e.f. 01.10.2024, the Central Government, on the recommendations of the GST Council has empowered the Principal Bench of GST Appellate Tribunal (GSTAT), constituted under sub-section (3) of section 109 of CGST Act, 2017, to examine anti-profiteering cases in terms of Notification No. 18/2024-Central Tax dated 30.09.2024. Therefore, the DGAP submitted its report dated 23.05.2025 to this office.
11. Shri Diwakar Sharma, representative of DGAP, has submitted that number of times the matter was investigated and examined by DGAP extensively. On the basis of investigation, no contravention of the provision under section 171(1) of the CGST, Act, 2017 was found on the part of the respondent.
12. In this matter it is apparent that proceedings against Respondent were initiated on the basis of the letter dated 18.04.2019 of the Secretary, NAA.
13. In view of the foregoing facts and circumstances as referred above, it is apparent that the investigation was conducted by the DGAP on several occasions under the direction of the higher authorities. On the basis of investigation, the DGAP arrived at the conclusion that the Respondent has not contravened with any provisions as contained under section 171(1) of the CGST, Act, 2017. Therefore, the report of the DGAP dated 23.05.2025 deserves to be accepted.
14. The report submitted by DGAP dated 23.05.2025 is accordingly accepted.
15. Consign the record.
16. A copy of this order be sent to the Respondent and to the concerned Commissionerate CGST/SGST for necessary action, if any.
17. Final order signed, dated and pronounced in open court today.