GSTAT Upholds DGAP’s Clean Chit in GST Anti-Profiteering Allegation

The proceedings against the Respondent, Nirma Limited, were initiated following a letter dated April 18, 2019, from the Secretary of the National Anti-Profiteering Authority (NAA), which made a reference to the Directorate General of Anti-Profiteering (DGAP) for a detailed investigation. The core allegation was that Nirma Ltd. had contravened Section 171(1) of the CGST Act, 2017 by failing to pass on the commensurate benefit of a tax rate reduction to the recipients, specifically the reduction mandated by Notification No. 41/2017 dated November 14, 2017. The DGAP conducted an initial detailed investigation and submitted a report on December 15, 2021, concluding that the Respondent had not contravened the law.

Thereafter, the NAA remitted the matter back for further investigation in May 2022 on specific issues like reduced display of Maximum Retail Prices (MRPs), affixing stickers on old stock, and justification for any increase in the base price. The DGAP submitted a second report on January 27, 2023, reiterating its conclusion of no contravention. Following a direction from the Competition Commission of India (CCI) in August 2024, the DGAP conducted yet another re-investigation, ultimately arriving at the same conclusion: no contravention of Section 171(1) of the CGST Act, 2017. The final report dated May 23, 2025, was submitted to the GST Appellate Tribunal (GSTAT), Principal Bench, which was empowered to examine anti-profiteering cases from October 1, 2024.

Issue Raised: Whether the Respondent, Nirma Limited, contravened the provisions of Section 171(1) of the CGST Act, 2017 by allegedly not passing on the commensurate benefit of the tax rate reduction effected by Notification No. 41/2017 dated November 14, 2017.

Decision of GST Tribunal: The GST Appellate Tribunal (GSTAT), Single Bench, accepted the final report submitted by the Directorate General of Anti-Profiteering (DGAP) dated May 23, 2025. The Tribunal noted that the matter was extensively investigated and examined by the DGAP on multiple occasions under the direction of higher authorities. In every instance of investigation and re-investigation, the DGAP consistently concluded that Nirma Limited, the Respondent, had not contravened any provisions as contained under Section 171(1) of the CGST Act, 2017.

The Tribunal held that the closure report submitted by the DGAP deserves to be and is therefore accepted. The GSTAT thereby confirmed the order under appeal and consigned the record.

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