Introduction:
With the rollout of GST 2.0 and a series of rate revisions, businesses are facing widespread uncertainty on whether product MRPs and prices must be revised in line with the benefits of reduced tax rates. While anti-profiteering provisions under Section 171 of the CGST Act have formally lapsed from 1st April 2025, recent circulars from the Department of Consumer Affairs and interpretational nuances under the Legal Metrology Rules have reignited industry concerns. This FAQ-based note seeks to clarify the legal, procedural, and practical aspects of price revision obligations, equipping industry and trade with clear guidance on how to approach this sensitive issue
Q1. Whether provisions of Anti-Profiteering as laid out under section 171 of the CGST Act are still applicable?
Ans: Anti-profiteering provisions are contained in section 171 of the Act providing for reduction in rate of tax or increase in ITC to be passed on to recipient by way of commensurate reduction in price.
Section 171 (2) provides for appointment by Central Government to constitute and authority or empower an existing Authority constituted under any law for the time being in force to examine the cases of anti-profiteering.
National Anti Profiteering Authority (NAA) followed by CCI were vested with powers to undertake examination for anti profiteering on request by any person. Said powers of authority have been put to an end vide sun set clause w.e.f. 1st April 2025 (As per Notification No. 19/2024 – Central Tax).
It is to be noted that the authority has been discontinued but the provisions of section remain.
In 54th Council Meeting Agenda, “The Secretary informed that Anti profiteering provisions are transitional provisions brought specifically in GST law and were extremely necessary at that time considering the monumental transformation brought about by the GST regime. He hoped that now, as GST has already stabilized, market forces would take care of the reduction in prices in case of rate reduction.”
Thus, it is to be noted that while section 171 (1) still exist to provide for anti profiteering provisions but there is no authority to undertake examination of the cases.
Q2. If the earlier provisions expired on 31.3.2025, can the government enforce compliance with Anti profiteering provisions under GST law?
Ans: No, once the sunset clause for anti-profiteering provisions took effect on 31st March 2025, the government cannot enforce businesses to comply with anti-profiteering provisions for transactions after this date. From April 1, 2025, no new cases or complaints can be registered, admitted, or enforced under Section 171 of the CGST Act.
However, law does not prohibit the Government from appointing any authority under section 171 (2).
Q3. Recently, Department of Consumer Affairs issued a circular dated 09.09.2025 providing for revision in the MRP of goods due to GST rate revisions. What are essential mandates under the said circular?
Ans: The circular issued by the department of consumer affairs provides that:
- Manufacturer, importer or packer is permitted to declare the revised MRP on the unsold stock as existed prior to rate revision under GST.
- MRP may be modified with:
- increased amount of tax where tax has been increased provided that increase in price should not be more than increase in rate of tax,
- reducing the MRP with reduced amount of tax where revised MRP shall not be higher than the extent of price after reduction of tax.
- Manufacturer or importer or packer shall
- make atleast two advertisements for revised MRP
- circulate notice to dealers
- circular notice to director of Legal Metrology in the Central Government and Controllers of Legal Metrology in the States.
- Unused preprinted packing material may also contain revised MRP as per above.
- Above provisions are applicable only with respect to the inventory or packing material, upto 31st December 2025 or till such date the stock is exhausted, whichever is earlier.
Q4. What is the legality and constitutional validity of this circular? Whether it can be said to be violating the constitution?
Ans: A question may arise as to whether a law makers mandate a price revision of goods/ services by way of an issuance of a circular under the legal metrology rules for matters within the guise of a taxation law which is primarily empowered to legislate the levy and collection of GST.
While there is no direct jurisprudence w.r.t the legal metrology law, however in the context of Anti-profiteering provisions as laid down u/s 171 of the CGST Act, the Delhi High Court while testing the legality and constitutional validity of this provision, in the case of Reckitt Benckiser India Pvt. Ltd. Vs. UOI 2024 (82) G.S.T.L. 344 (Del.), held as under:
“Section 171 of the Act, 2017 mandates that whatever is saved in tax must be reduced in price. Section 171 of the Act, 2017 incorporates the principle of unjust enrichment. Accordingly, it has a flavor of consumer welfare regulatory measure, as it seeks to achieve the primary objective behind the Goods and Services Tax regime.”
Article 246A of the Constitution of India empowers the Parliament and Legislatures to make laws ‘with respect to’ goods and services tax. This expression is similar to that used in Article 246 which empowers the Parliament and State Legislatures to make laws ‘with respect to’ the various subject-matters enumerated in the Seventh Schedule. The Supreme Court has consistently held that the expression ‘with respect to’ is of wide amplitude and thus, the law making power with regard to Goods and Services Tax includes all ancillary, incidental and necessary matters.
Section 171 of the Act, 2017 has been incorporated with the intent of creating a framework that ensures that the benefit reaches the ultimate consumer. There cannot be any room for allowing unjust retention of benefit of reduction in rate of tax or benefit of input tax credit with the manufacturer/supplier/distributor.
As held hereinabove, Section 171 of the Act, 2017 does not levy any tax on supplies and hence these judgments do not apply to the present batch of matters. Consequently, the impugned provisions are not a price fixing mechanism and they do not violate either Article 19(1)(g) or Article 14 or Article 300A of the Constitution of India.
The court also dismissed the reliance placed on the landmark decisions rendered in the cases of CIT v. B.C. Srinivasa Setty, (1981) 2 SCC 460 = [1981] and CCE v. Larsen & Toubro Ltd., (2016) 1 SCC 170, as completely misconceived as both these judgments were passed specifically in the context of levy of taxes and not in the context of anti-profiteering provisions.
Based on the above, even authors are of the view that under the general consumer protection laws, the demand from the tax authorities to pass on the benefit of reduction in taxes to be passed on the consumers can be said to be legal and valid.
Q5. Whether compliance with above circular is mandatory?
Ans: The circular is issued under Rule 33 of Legal Metrology (Packaged Commodities) Rules 2011 which is a relaxing provision. The rule empowers Central Government to permit a manufacturer or packer to pack for sale the packages for a reasonable period by relaxing one or more provision of these Rules with such corrective measures as may be specified. Thus, the circular can be applicable where the price revision is undertaken consequent to change in rate of tax. However, it must be noted that this circular is a beneficial provision allowing for price revision by relaxing the applicability of norms under the Legal Metrology Act and by no means this can be interpreted to cast a mandatory requirement on the trade.
Further, this circular cannot be a guideline or an order or a clarification mandating revision of the price or a quantification of its revision.
Q6. Whether this circular can be enforced for compulsory reduction of prices under GST?
Ans: As discussed previously, the rule is relaxing provision permitting the manufacturer and trade to use existing inventory or packing material with revised price without changing the entire packing materials. Further, the circular has not been issued under the GST Act or rules made thereunder. Thus, the circular cannot be enforced under the GST laws.
Q7. Is it compulsory for a supplier to pass on the benefit of reduction in rate of tax by way of revising the MRP or otherwise?
Ans: Although there is no statutory enforcement requiring revision of price owing to reduction in rate of taxes but considering that the objective of rate rationalization has been to spur the demand, improve consumption and make the common man and aspirational items affordable. Amicus Curiae in the case of Reckitt stated as under:
“The intent of the Act, 2017 is to provide a common national market, boost productivity, increase competitiveness, broaden the tax base and make India a manufacturing hub.”
Amplifying the above, view Delhi High Court held as under:
“This Court is of the view that the amounts foregone from the public exchequer in favour of the consumers cannot be appropriated by the manufacturers, traders, distributors etc. To allow them to do so would amount to unjust enrichment. Consequently, when the Goods and Services Tax rate gets reduced or the benefit of input tax credit, becomes available as a necessary consequence the final price paid by the recipient obviously requires to be reduced.”
Hence, businesses must take a decision after carefully considering the competitive forces, consumer sentiments and other relevant considerations and the above views expressed while taking the decision in this regard.
Q8. How should revised prices be calculated if one is willing to pass on the benefit where rate of tax has been revised from 18%/12% to 5% or 28% to 18%?
Ans: The circular issued by the Ministry of Consumer affairs provides that the revised MRP should reflect the price reduction due to change in rate of tax. Plain reading of the same indicate that there should be straight forward reduction in the price with effective change in rate of tax without giving effect to other factors leading to change in the cost of products etc. However, it is to be noted that this circular is applicable only in respect of the existing goods or packing materials. Further, this circular is not enforceable under the GST laws.
Thus, in order to pass on the benefit to the consumer, the manufacturer while on the one hand be considerate by reducing the prices to the tune of effective change in the rate of tax, on the other hand, it is also possible for them to recalibrate the prices after considering all factors affecting the costing and prices of the product on a case to case basis.
For example, if there is additional cost of packing material is to be incurred for repackaging, relabeling etc. of the goods in order to comply with the requirements, the same can be recalibrated in the pricing. Similarly, there would be many practical business scenarios, that needs to be analysed and decided upon.
Q9. What factors could be relevant to determine the price in above cases?
Ans: The various factors that could be relevant in determining the revised pricing of the goods can be as under:
- Cost of accumulation credit during the transition period which is not expected to be utilised in the foreseeable future,
- Increased cost of working capital due to continued locking up of working capital in the ITC under inverted structure,
- ITC not capable of being utilised post rate change and not entitled for refund due to permanent inversion etc.
- Cost on account of non-refund of compensation cess,
- Fungibility of compensation cess when subsumed into GST which hitherto was a cost.
Q 10. While the circular requires amending the pricing by revising the MRP, the inventory lies at various places including warehouses, distributor’s locations, Retail etc. In this case, what are the various measures that need to be taken to stay compliant?
Ans: Firstly, the circular issued by the department of consumer affairs provide as under:
- Declaration of the changed retail sale price shall be made by way of stamping or putting sticker or online printing, as the case may be after complying with the following conditions:
- The original MRP shall continue to be displayed and the revised price shall not overwrite it,
- Manufacturers or packer or importer shall make atleast two advertisements in one or more newspapers,
- Notice in this regard must be circulated to the dealers with intimation to the Director or Legal Metrology in the Central Government and Controllers of Legal Metrology in the States and UT, indicating the change in price.
- It is also clarified that any wrapper or packaging material that could not be exhausted prior to the revision of GST, may be used for packing upto Dec 31st, 2025 or till such date the wrappers are exhausted, whichever is earlier.
Further, during the implementation of GST, under similar circumstances, an office memorandum was issued by the National Pharmaceuticals Pricing Authority stating as under:
- Manufacturers must comply with NPPA-fixed or revised prices from the date of notification by issuing revised/supplementary price lists (Form V) to dealers, retailers, regulators, and government.
- Price lists should be quickly disseminated (email/WhatsApp) and uploaded to NPPA’s IPDMS for proof.
- Retailers and manufacturers must ensure that no formulation is sold above the notified price or the label price, whichever is lower, including old stock.
- The notified prices apply immediately, and consumers must get the lower of the notified or label price.
- Recalling, re-labelling, or re-stickering old stock is not mandatory if revised price lists are issued and compliance at retail level is ensured, though manufacturers may voluntarily do so.
Further, in the context of pharmaceutical products, The Hon’ble Supreme Court in aforesaid GlaxoSmithKline Pharmaceuticals limited has held as under:
“the ultimate object of the DPCO is that there is no deception to a consumer and he is sold the formulation at a price not exceeding the price specified in the current price list or price indicated on the label of the container or pack thereof, whichever is less. Logically it follows that there cannot be two prices at the end point of the distribution chain depending on the batch number. A consumer approaching a chemist/retailer can hardly be offered two prices for the very same product based only on the difference in batch numbers. Consumer must get the benefit of the notified price. That is the ultimate objective of DPCO. The batch number cannot override the benefit to which a consumer is entitled on price reduction of a formulation. A fair reading of DPCO leaves no manner of doubt that a formulation cannot be sold to the consumer at the higher price (for earlier batch numbers). In this view of the matter, we find merit in the submission of the learned Additional Solicitor General that the provisions of DPCO requires not just the end point sale to be at the notified price, but also every sale within the distribution chain must be at the notified price, if such sale is made after the date on which sale price is operative”.
Based on the above, the manufacturer must take above precautionary steps to comply with the legal requirements and also clearly intimate and enforce upon the supply chain to comply with these requirements.
Q11. If the product is exempted from 5%/12%/18%, what additional factors would be relevant?
Ans: In case the product becomes exempt, then following additional factors need to be considered in determining the revised prices of the goods:
- Disallowance of credit under section 18 on inventory in hand,
- Reversal of credit on capital goods where the 60 months expiry period is pending,
- Continued non-availment or reversal of credits under Rule 42/43 due to product being exempted.
Q12. If products were earlier taxable @ 12% and few are now shifted to 5%, while others are shifted to 18%. Can a net off benefits received from 5% with excess payment to be made at 18?done while determining the revised prices for 5% products?
Ans: If a decision is taken to pass on the benefit, netting off cannot be applied in the cases of profiteering, as the benefit of tax rate reduction has to be passed on to each customer on each product supplied by a registered person at a SKU level. Every recipient is entitled to the benefit of tax rate reduction by way of reduced prices.
Delhi High Court in the case of Reckitt Benckiser India Pvt. Ltd. Vs. UOI 2024 (82) G.S.T.L. 344 (Del.), held as under:
“This Court is in agreement with the submission of Mr. Zoheb Hossain, Learned Counsel for the Respondents, that the benefit of tax reduction has to be passed on at the level of each supply of SKU to each buyer and in case it is not passed on, the profiteered amount has to be calculated on each SKU.”
Therefore, in the instant case, the benefits from reduction of tax rate to 5?nnot be netted off against the excess payment to be made at 18%.
Q13. While the products are shifted from 12% to 5%, however in order to create awareness about the rate change and increase sales, certain business costs like marketing, additional commission etc., are incurred. Can these costs justify base price hikes?
Ans: Any benefit arising due to reduction in tax rate or availability of input tax credit shall be passed on to the recipient only by way of reduction in prices. The law did not provide any other means to pass on the credit and neither did provide the supplier to increase the costs.
Delhi High Court in the case of Reckitt Benckiser India Pvt. Ltd. Vs. UOI 2024 (82) G.S.T.L. 344 (Del.) while evaluating the constitutional validity of the Anti-Profiteering Provisions and other incidental issues, held as under:
“This Court is of the view that no fixed/uniform method or mathematical formula can be laid down for determining profiteering as the facts of each case and each industry may be different. The determination of the profiteered amount has to be computed by taking into account the relevant and peculiar facts of each case. There is ‘no one size that fits all’ formula or method that can be prescribed in the present batch of matters. Consequently, NAA has to determine the appropriate methodology on a case to case basis keeping in view the peculiar facts and circumstances of each case.”
“However, this Court finds that the methodology adopted by NAA and DGAP to arrive at the profiteering amount of the real estate industry was generally based on the difference between the ratio of Input Tax Credit to turnover under the pre-Goods and Services and Tax and post- Goods and Services and Tax period. This Court is in agreement with the contention of the Learned Counsel for the petitioners representing the real estate companies that the methodology adopted by NAA is flawed as in the real estate sector, there is no direct correlation between the turnover and the Input Tax Credit availed for a particular period. The expenses in a real estate project are not uniform throughout the life cycle of the project and the eligibility of credit depends on the nature of the construction activity undertaken during the particular period. As it is an admitted position that neither the advances received nor the construction activity is uniform throughout the life cycle of the project, the accrual of Input Tax Credit is not related to the amount collected from the buyers. This Court is in agreement with Learned Counsel of the petitioners that one needs to calculate the total savings on account of introduction of Goods and Services and Tax for each project and then divide the same by total area to arrive at the per square feet benefit to be passed on to each flat buyer. This would ensure that flat-buyers with equal square feet area received equal benefit. The Court, while hearing the present batch of matters on merits, shall take the aforesaid direction/interpretation into account.”
Hence, taking cue from the decision rendered above, in view of the authors, this a commensurate increased cost attributable to or incidental to GST rate revision should be considered while deciding revised price so long as the revision is fair and justified basis keeping in view the peculiar facts and circumstances of each case.
Q14. In case where the GST rate of a product drops from 12% to 5% but while selling the product at 12%, a discount of 20% is already offered to the customers. Whether this can be treated as passing on benefits to the customer?
Ans: No, Discounts that are regularly offered due to market practices, competition, or demand conditions cannot be treated as a substitute for passing on the benefit of GST rate reduction. For instance, the market price of the product is Rs. 1,000 and the supplier generally sells it at Rs. 800 after giving a 20% discount, in such a case, when GST is reduced from 12% to 5%, the base for profiteering analysis would be Rs. 800 (the discounted price actually charged), not Rs. 1,000. This is because the 20% discount was part of your normal business practice and not linked to the GST rate reduction. [DGAP vs. M/s Hungry Eyes]
Q15. What documents can be used for substantiating that benefits have been passed on?
Ans: Generally, external documents like credit notes, bank statements etc., could be used to prove benefits have been passed on. In some cases, DGAP, in the past had obtained declarations from the buyers stating that they have received benefits in the form of reduction in prices. However, internal documents like board resolution to pass on benefits had not been accepted in the past [Vijay Pal Singh vs. M/s Nandi Infratech Pvt. Ltd]. Also, it is upon the supplier to prove that he has passed on benefits with proper evidence without any doubt. Therefore, the supplier is required to keep proper documentation with respect to passed on benefits.
Q16. Whether price comparison is to be done at the pre-tax level or final invoice price level (including taxes)?
Ans: The price comparison must be made at the final invoice price level, inclusive of taxes (GST), not just the pre-tax or base price. It has been held by GSTAT in case of (DGAP Versus Urban Essence (Subway Franchisee) that the benefit of GST rate reduction or input tax credit must be passed on by way of a commensurate reduction in the total price paid by the consumer, which is inclusive of GST.
Q17. Whether the benefit passed on to the customer is required to be separately disclosed in the invoice? If yes, how is such a disclosure required to be made?
Ans: The law does not specifically mention that the differential benefit must be separately disclosed in the invoice. However, as an abundant precaution and for future evidence, one may take a decision to make disclosures in the invoice by way of discount or in some other appropriate manner.
Q18. The final retailer does not reduce the price of the product for the end consumer. Whether the manufacturer would be liable to any consequences for the same?
Ans: Responsibility of manufacturer is to only declare the revised MRP wherever revision undertaken in compliance with the circular issued by Ministry of Consumer Affairs. This responsibility is casted only pertaining to the inventory held by the respective person in its stock.
In other words, to the extent of inventory that is already sold by the manufacturer in the supply chain to the dealers/ distributors or any other business partner, then it is the decision of each supplier in the supply chain to pass on the benefit at next chain up to the retail and end consumer.
At the most, the manufacturer may provide a legitimate support (financial or otherwise) to the supply chain being a business partner, which is more a business call than a legal obligation.
Thus, a manufacturer may not be held responsible for not passing on benefit by the retailer. Held by GSTAT in case of Raj & Co. that the distributor, vide his distribution ship agreement with manufacturer, was entitled to determine his sale price within the MRP. Thus, the failure of retailer not to pass on the benefit cannot be attributed to manufacturer.
Q19. In case where the product is sold at Re. 1 or Rs. 5. It is not possible to further reduce the price. How can the benefit be passed on in such cases?
Ans: The definition of retail sale price in the Legal Metrology Rules earlier had provided for rounding off the price to preceding rupee (if less than 50 paise) and fraction of above 50 paise and up to 95 paise to fifty paise. However, such rounding of provisions has been amended w.e.f. 01.01.2018 to provide for rounding off to 50 paise.
Section 170 of CGST Act provides for rounding off the price of taxes to the nearest rupee and, for this purpose, where such amount contains a part of a rupee consisting of paise, then, if such part is fifty paise or more, it shall be increased to one rupee and if such part is less than fifty paise it shall be ignored. Further, there are no prevalent monetary denomination to settle the prices in paisa.
Harmonious reading of both the provisions would indicate that the price can be rounded off to the nearest fifty paise or rupees (taking into account rounding off of taxes) and it may not be expected to revise the price in decimal for such small packet.
In order to establish the bonafide of price reduction, the manufacturer may increase the quantity within same price provided such benefit is for the end consumer, not for the resellers.
National Anti-profiteering authority vide order dated 24th December, 2018 passed in Ankit Kumar Bajoria vs. M/s Hindustan Unilever Ltd., Case No.20/2018, had accepted the practice of increasing grammage, though this was not accepted by NAA in subsequent cases. Later, Delhi High upheld that price revision in such cases is possible as per Legal Metrology Rules.
Further, in respect of existing inventory in hand, as price revision may not be possible in the decimal, the manufacturer may intimate the same to director of Legal Metrology.
Q20.What should be the period of time for which price reduction is required to be observed?
Ans: There are no specific provisions in this regard. In terms of earlier provisions of section 171, Delhi High Court has held that:
“It is not proper or feasible to contemplate any specific period of time for application of the reduced price, as the same has to take effect so long as the direct relation between the reduction of tax rate or the benefit of Input Tax Credits exists and there is no other factor effecting/countering the same. If, conceptually, the reduction of tax rate has taken place on a specified date and there are no justified variations in the cost price or other factors for offsetting such reduction in the prices for a particular period of time, clearly for that period a reduced price must govern the transaction.” This principle may be observed by busineses while taking any decision.
Moreover, the circular issued by Ministry of Consumer Affairs deal with the mandate of price revision for the inventory in hand or 31st December 2025, whichever is earlier. These provisions could also be kept in mind while observing the timing of price reduction.
Q21. In case there is an increase in the prices of raw materials and other components, whereas there is a reduction in the rate of tax on the final product. The increase in cost is more than the reduction in rate of tax rate. How can the price be reduced and refixed?
Ans: While summing up in case of Reckitt Benckiser India Private Limited, Delhi High Court had held that there should not be abuse of power by adjudicating authority on account of not considering the genuine basis of variations in other factors such as cost escalations on account of which the reduction stands offset, skewed input credit situations etc. This view has also been accepted by the GSTAT. Hence, such genuine factors leading to price escalations could be considered while refixing the price.
Q22. In case there is an all-inclusive contract with the customer, there is a reduction in the rate of GST. How would tax be computed in such cases?
Ans: If the suppliers retain the differential amount by keeping the contract value fixed, it is treated as profiteering. The required compliance in this case would be as follows:
- Reduce the contract price payable by the recipient, so that the effective benefit of the reduced taxes reaches them.
- If commercial reasons prevent you from reducing the contract price, you can issue a credit note to the customer for the differential amount.
Q23. In case where the business is engaged in the construction and sale of residential apartments. There is a reduction in the rate of tax on cement and other items used in the construction of an apartment. Whether there is a need to reduce the corresponding prices, especially in instances where an agreement to sell has already been entered into and some advances have already been received?
Ans: While reduction in GST rate of cement and other material certainly results in the reduction of cost. However, in the case of real-estate sector where the work is completed over a long period of time and even monies are received over a long period of time, the aspect of price reduction cannot be based on one-to-one correlation.
Considering the typicality of the Real-Estate Sector, Delhi High Court made a specific remark as under:
“This Court finds that the methodology adopted by NAA and DGAP to arrive at the profiteering amount of the real estate industry was generally based on the difference between the ratio of Input Tax Credit to turnover under the pre-Goods and Services and Tax and post- Goods and Services and Tax period. This Court is in agreement with the contention of the Learned Counsel for the petitioners representing the real estate companies that the methodology adopted by NAA is flawed as in the real estate sector, there is no direct correlation between the turnover and the Input Tax Credit availed for a particular period. The expenses in a real estate project are not uniform throughout the life cycle of the project and the eligibility of credit depends on the nature of the construction activity undertaken during the particular period. As it is an admitted position that neither the advances received nor the construction activity is uniform throughout the life cycle of the project, the accrual of Input Tax Credit is not related to the amount collected from the buyers. This Court is in agreement with Learned Counsel of the petitioners that one needs to calculate the total savings on account of introduction of Goods and Services and Tax for each project and then divide the same by total area to arrive at the per square feet benefit to be passed on to each flat buyer. This would ensure that flat-buyers with equal square feet area received equal benefit. The Court, while hearing the present batch of matters on merits, shall take the aforesaid direction/interpretation into account.
Q24. In case there is certain inventory on which compensation cess has been paid in the past. The government has abolished the compensation cess. If the refund or adjustment is not permitted by Government for the same, can it be considered for increased cost while refixing the price?
Ans: Yes, Delhi High Court has held that skewed input tax credits is also a relevant factor while refixing the price.
Q25. In case there is a complaint raised by any customer w.r.t non-reduction of the price, then whether the scope of the authorities in investigation be restrictive to the complainant or whether the investigation by the authorities can extend to the whole bouquet of goods/ services supplied by the taxpayer?
Ans: As explained above in detail, the primary intention of imposing such provisions is to restrict the trade from making an unjust advantage or a profiteering out of reduction in the tax rates.
Further, the context of similar powers of investigation exercised by the Director General under the Competition Act, 2002, the Supreme Court in Excel Crop Care Ltd. v. Competition Commission of India, (2017) 8 SCC 47, has held that the Director General would be well within its powers to investigate and report on matters not covered by the complaint or the reference order of the Commission, and an interpretation to the contrary would render the entire purpose of investigation nugatory.
Similarly, the High Court of Delhi in Cadila Healthcare Ltd. & Anr. v. CCI & Ors., (2018) SCC Online Del 11229 = [2018], relying on the judgment of the Supreme Court in Excel Crop Care Ltd. (supra) has clarified in express terms that the scope of investigation by the Director General is not restricted to the matter stated in the Complaint and includes other allied as well as unenumerated matters.
Consequently, the expansion of investigation or proceedings being carried out to ensure compliance with the legislative objective cannot be said to be beyond the scope to be ultra vires.
Conclusion:
The GST 2.0 rate revisions present both opportunities and challenges: while the strict enforcement of anti-profiteering has ended, businesses remain under the lens of consumer protection laws, market expectations, and competitive pressures. The responsibility now shifts more heavily on businesses to make balanced, transparent, and well-documented pricing decisions.
To stay compliant and competitive, businesses should:
- Review pricing strategies immediately in light of GST rate changes and circulars issued by consumer authorities.
- Document internal decision-making and maintain evidence of benefit pass-throughs or adjustments to defend against potential disputes.
- Factor in commercial realities like input tax credit reversals, raw material cost increases, or sector-specific peculiarities when recalibrating prices.
- Communicate clearly with customers and channel partners to preserve goodwill and avoid reputational risks.
Considering short window of timeline available, it is important to take proactive steps to not only remain compliant but also build consumer trust, increase market share and secure a better market positioning in the new GST 2.0 regime.
Disclaimer: These are not the view of the government or any regulatory authorities. The views and opinions expressed in this article are solely those of the author(s) and do not necessarily represent the views of the firm. The author(s) have shared these insights in their personal capacity, and neither the author(s) nor the firm shall be held responsible for any decisions taken based on the contents of this article.