GSTAT New Delhi Directs Tata Play To Deposit ₹450 Crore In Consumer Welfare Funds For GST Profiteering

The Principle Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) in New Delhi on 11 March directed Tata Play Ltd. to deposit Rs. 450.18 crore in the Central and State Consumer Welfare Funds in a 50:50 ratio, holding that it engaged in GST profiteering.

A Division Bench comprising President Justice (Retd.) Dr. Sanjaya Kumar Mishra and Technical Member A. Venu Prasad concluded that the company had failed to pass on the tax benefit to consumers as mandated under the GST Anti-Profiteering law.

The Bench held:

"it is clear, under the pre-GST regime, the subscriber paid approximately ₹390 on a ₹300 subscription, reflecting a 30% cumulative tax burden. Under GST, the total payable reduces to ₹354, reflecting an 18% tax burden. Additionally, GST allows seamless input tax credit to operators, eliminating cascading effects that existed under the earlier regime."

The proceedings arose from an anti-profiteering matter filed by the Director General of Anti-Profiteering (DGAP), which alleged that Tata Play Ltd. had retained benefits arising under the GST regime, without passing the benefit of input tax credit to subscribers, as mandated under Section 171 of the CGST Act, 2017.

The Tribunal examined the DGAP's report and accepted its computation, holding that Tata Play had profiteered to the tune of Rs. 450.18 crore. It observed:

"It is clear that the respondent has not passed the benefit accrued due to introduction of GST. Hence, based on DGAP's quantified findings and judicial principles, the Tribunal concludes that (a) a net tax benefit accrued to the respondent post-GST due to subsummation of various taxes and availability of increased Input Tax Credit, and (b) such benefit of GST introduction was not passed on to the consumers."

On the scope of interest under the anti-profiteering framework, the Tribunal stated:

"We come to the conclusion that report submitted by the DGAP that the Respondent M/s Tata Play Ltd. profiteered an amount of Rs. 450.18 crores. Hence, we direct that the Respondent to deposit Rs. 450.18 crores in the Central Consumer Welfare Fund as well as in the State Consumer Welfare Funds in the ratio of 50:50 equally, within three months."

Accordingly the Tribunal confirmed profiteering and directed the concerned GST Commissioners to submit a compliance report within four months.

For the Appellant: Harkesh Meena, Assistant Commissioner assisted by Praveen Kumar, and Ajay Tehlan, Addl. Asst. Directors