The Goods and Services Tax Appellate Tribunal (GSTAT) Principal Bench, New Delhi, has delivered its first-ever Final Order No. NAPA/31/PB/2025 dated August 07, 2025, in an anti-profiteering matter, upholding a finding that M/s Urban Essence (Subway franchisee) profited ₹5,47,005 by not passing on the GST rate reduction benefit on restaurant services from 18% to 5% (effective 15.11.2017) to consumers.
The Director General of Anti-Profiteering (DGAP) initiated proceedings based on a complaint regarding one product, but expanded the probe to all 340 products sold by the respondent, citing Section 171(2) of the CGST Act and Rule 129(2) of the CGST Rules. The Tribunal affirmed this wider scope, ruling that investigations are not confined to the specific item in a complaint.
Key findings:
- GST Rate Reduction Benefit Denied – The respondent increased base prices immediately after the rate cut, neutralising the tax benefit to customers.
- Burden of Proof Not Discharged – The respondent failed to provide any cogent evidence that the price hikes were due to genuine cost increases.
- ITC Claim Rejected – No invoices/debit notes were produced to support claims under CBIC Press Release No. 62/2018.
- Legal Principle – GSTAT reiterated that Section 171’s presumption of price reduction is rebuttable but must be countered with clear, verifiable evidence.
Order:
The respondent must deposit ₹5,47,005 plus 18% interest (from 15.11.2017) into the Consumer Welfare Funds of the Centre and Maharashtra within 3 months, failing which recovery will follow. No penalty was imposed as the violation period preceded the introduction of Section 171(3A) penalties (from 01.01.2020).
This marks a significant milestone as the first final anti-profiteering ruling by the GSTAT Principal Bench since taking over jurisdiction from the erstwhile NAA, reflecting a firm stance on consumer benefit protection under GST.
The Complete Final Order can be accessed at: https://www.naa.gov.in/docs/1754999176Urban-Essence-Order.pdf
