2026-VIL-76-GSTAT-DEL-NAPA
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SGST Tribunal

GST - Anti-profiteering – Failure to pass on the benefit of reduction in the rate on LED Television - Validity of mode of passing on benefit by Electronic gift vouchers, Monetary value of tax benefit – Respondent submitted that it had complied with Section 171 and passed on benefit through Electronic Gift Vouchers (EGVs) issued to customers - Whether Electronic Gift Vouchers constitute valid and efficacious mode of passing on benefit under Section 171 - HELD – The activated EGV is credited to wallet of customer and is available for utilization without any time limitation with no expiry date attached. EGV is not conditional on future purchase of specific product or category and customer is free to utilize credited amount for purchase of any product without restriction - Issuance of EGVs results in direct and unconditional transfer of benefit amount to concerned customer as upon issuance EGV customer receives credit equivalent to profiteered amount reflected in customer's account - Objective of anti-profiteering provisions under Section 171 is to ensure that benefit of GST rate reduction is passed on to consumers and suppliers do not make profit from tax rate reduction. Section 171 does not prescribe any particular mode or manner for passing on benefit and what is essential is that benefit reaches ultimate recipient and supplier does not retain same - EGVs which provide credit against future purchases achieve objective of Section 171 by directly transferring monetary value of tax benefit to consumer. Once amount is credited to customer's EGV account Company no longer derives benefit from tax reduction thereby fulfilling object of Section 171 - EGVs are traceable to specific invoices and customers and substantial number of customers have already utilized EGV balance strengthening conclusion that benefit has been passed on. Issuance of EGVs constitutes valid and efficacious mode of passing on benefit under Section 171 – The nomenclature ‘Offers’ and ‘Cashback’ is merely system-generated description and does not by itself negate passing on of GST benefit especially when credits are traceable to specific transactions - Respondent has substantially complied with mandate of Section 171 by passing on benefit to recipients through combination of credit notes and EGVs - The matter is disposed of accordingly
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