2026 (1) TMI 1055 - AT - GST

Profiteering calculation methodology: Reinvestigation ordered to verify post-GST purchase data and pre-GST rate comparisons, matter remitted.

Decision directs re-investigation of profiteering calculation methodology, requiring verification of the respondents submitted post-GST purchase data and ... Profiteering - calculation of the profiteered amount - correctness of methodology adopted by DGAP for investigation - HELD THAT:- Keeping in view the spirit of principal laid down by Hon’ble High Court of Delhi in the case of Reckitt Benckiser India Pvt. Ltd. Vs. Union of [2024 (1) TMI 1248 - DELHI HIGH COURT], submissions made by the respondent regarding comparison of the GST availed on the actual Goods and Services purchased in the Post GST period with the ITC available on such goods and services by applying the applicable rates on such goods and services in the pre- GST period carries weight. The contentions contained in the written submission as well made by learned counsel during the course of personal hearing have merits. Since, the respondent have claimed that they have submitted the data and documents of actual goods and services purchased in the post-GST period and the respective applicable rates on goods and services in Pre- GST period, DGAP needs to verify this data. The reinvestigation is required by the DGAP. The matter is sent back to the DGAP for the re-investigation in accordance with the provision contain in the Rule 133(4) of the Goods and Services Tax Act, 2017. Matter disposed off. Issues: Whether the methodology and computation of alleged profiteering by DGAP require re-examination and whether the matter should be remitted to DGAP for re-investigation under Rule 133(4) of the Goods and Services Tax Act, 2017.Analysis: The DGAP performed a comparative exercise of pre-GST and post-GST availability of credit and derived a percentage increase in ITC availability which was applied to post-GST purchases to compute alleged savings and resultant profiteering, and additionally applied GST on the profiteered amount. The respondent contested the methodology, relying on the principle that comparisons must be between identical goods and services (a same-basket comparison) and produced item-wise post-GST purchase data and pre-GST applicable rates for verification. The respondent also challenged the addition of GST on the benefit amount. Applying the legal framework concerning Section 171 (obligation to pass on benefit) and procedural scope of Rule 133(4), the factual comparability of pre- and post-GST purchase items and the respondent's production of itemised data require verification before a final profiteering computation can be sustained.Conclusion: Re-investigation by DGAP is directed under Rule 133(4) of the Goods and Services Tax Act, 2017 to verify the respondent's item-wise post-GST purchase data, rework the ratio of ITC in the pre-GST period, compare it with the post-GST period on a same-basket basis, and recompute any profiteering; the respondent shall furnish additional documents or information as required by DGAP.