Anti-profiteering penalty under GST cannot apply retrospectively where the specific penalty provision was introduced later.

A penalty for failure to pass on the benefit of a rate reduction under Section 171(1) of the CGST Act could not be imposed for a period before Section 171(3A) was inserted. Section 122(1)(i) was held not to cover this specific anti-profiteering contravention, and the later penalty provision introduced by the Finance Act, 2019 operated only prospectively from 01.01.2020. Because the alleged contravention related to an earlier period, the notice proposing penalty under Section 122(1)(i) was withdrawn.

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Issues: Whether penalty could be imposed for violation of the anti-profiteering obligation under Section 171(1) of the Central Goods and Services Tax Act, 2017 for the period before insertion of Section 171(3A), and whether the notice issued under Section 122(1)(i) could be sustained.

Analysis: The Authority noted that the profiteering amount had already been determined earlier and the only surviving question was the proposed penalty. It held that Section 122(1)(i) of the Central Goods and Services Tax Act, 2017 did not cover a failure to pass on the benefit of rate reduction under Section 171(1). The Authority further observed that specific penalty provision for such contravention was inserted only later by Section 112 of the Finance Act, 2019 through Section 171(3A), effective from 01.01.2020. Since the alleged contravention occurred between 01.11.2017 and 31.08.2018, the later penalty provision could not be applied retrospectively.

Conclusion: Penalty could not be imposed for the earlier period, and the notice for penalty under Section 122(1)(i) was withdrawn.

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