GSTAT Finds Profiteering in Instant Noodles | Deposit to CWF Ordered

Case Details: DG Anti Profiteering, Director General of Anti-Profiteering, DGAP vs. C.G. Foods [2026] 183 taxmann.com 241 (GSTAT-NEW DELHI)

Judiciary and Counsel Details

• Anil Kumar Gupta, Technical Member

Facts of the Case

The Director General of Anti-Profiteering (DGAP) filed a complaint, alleging that the assessee had not passed on the GST rate reduction from 18% to 12% on instant noodles supplied. The DGAP report showed that the assessee had increased base prices for several SKUs after the rate cut, effectively denying customers the benefit. It also submitted documents showing higher costs for raw materials, packaging, fuel, and freight, but these mostly related to periods before the rate reduction and did not justify withholding the benefit. The matter was accordingly placed before the Goods and Services Tax Appellate Authority (GSTAT).

GSTAT Held

The GSTAT held that the assessee had contravened the provisions of Section 171(1) of the CGST Act and the Delhi GST Act by denying customers the benefit of tax reduction. The Authority observed that the DGAP report demonstrated that the assessee had profiteered. It held that increases in cost prior to the rate reduction did not excuse non-passing of the statutory benefit. Consequently, the Authority directed the assessee to deposit the profiteered amount in the Consumer Welfare Fund created by the Central and State Governments equally, confirming the applicability of Section 171 of the CGST Act and the Delhi GST Act.

List of Cases Referred to

• Reckitt Benckiser India (P.) Ltd. v. Union of India [2024] 158 taxmann.com 675/102 GST 495/82 GSTL 344 (Delhi) (para 3)
• CIT (Central)-I v. Vatika Township (P.) Ltd. [2014] 49 taxmann.com 249/227 Taxman 121/367 ITR 466 (SC) (para 17).