The Anti Profiteering division of GST Appellate Tribunal (GSTAT) in its first order, has asked a franchisee of Subway, Urban Essence to deposit profiteered amount of over ₹5.47 lakh. This is also the beginning of anti-profiteering mechanism post end of National Anti-Profiteering Authority (NAA) and adjudication by the Competition Commission of India (CCI).
“The report submitted by the DGAP (Director General of Anti-Profiteering) that the Respondent has been profiteered a sum of ₹5,47,005 by not passing on a commensurate reduction of the prices of food products is correct. Hence, it is hereby directed that Respondent shall return a sum of ₹5,45,005 along with the interest of 18 per cent from the date of collection of the higher amount i.e. November 15, 2017 to be deposited in consumer welfare fund created by Centre and State of Maharashtra under section 57 of the CGST Act within a period of 3 months failing which, it shall be recovered by the Concerned Jurisdictional CGST / SGST Commissioner,” a single member bench of Sanjaya Kumar Mishra, President (Principal Bench), of GSTAT said in a ruling pronounced on August 5.
The bench observed that there is no dispute till November 14, 2017. The 18 per cent GST for Restaurant Services was was reduced to 5 per cent w.e.f November 15, 2017.
It is also not disputed by the Respondent (Urban Essence) on November 15, 2017 and thereafter he continued the price of the product as it was prevailing prior to the said date, “there is not an iota of evidence/materials that products suffered a increment prices because of any valid reason, which compel him to raise the price of the goods and thereby did not pass 7.56 per cent actual reduction of taxes to the consumers,” said the bench.
An tax expert feels this ruling is significant for multiple reasons. Most notably, it is the first final order delivered by the GST Appellate Tribunal’s Anti-Profiteering Division, signalling that this newly empowered arm is now fully functional. The fact that the Hon’ble “President of the GSTAT himself presided over the proceedings, heard the matter, and passed the order underscores the seriousness with which anti-profiteering enforcement will now be undertaken,” he said.
Further, this decision sets a precedent for how future cases under Section 171 of the CGST Act, 2017 will be handled. The Tribunal upheld the DGAP’s computation of profiteering across all products, even though the original complaint pertained to only one item, thereby affirming the wide investigative mandate conferred under the law. “By rejecting arguments based on operational cost increases and clarifying that such factors cannot dilute the statutory obligation, the order makes it clear that the benefit of GST rate reductions must be passed on to consumers through a commensurate reduction in prices,” he said.
