Text
The text below is the section as served by the CBIC tax information portal on 17 September 2026, with the portal's own amendment footnote markers (shown as small numerals before a bracket) and its footnotes.[1] The Act as published in the Gazette of India is the legal source.
Section 171, verbatim (show)
Section 171
* Section 171. Antiprofiteering measure.- **
(1) Any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices.
(2) The Central Government may, on recommendations of the Council, by notification, constitute an Authority, or empower an existing Authority constituted under any law for the time being in force, to examine whether input tax credits availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him.
2[Provided that the Government may by notification, on the recommendations of the Council, specify the date from which the said Authority shall not accept any request for examination as to whether input tax credits availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him.
Explanation1.––For the purposes of this sub-section, “request for examination” shall mean the written application filed by an applicant requesting for examination as to whether input tax credits availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him.
Explanation 2.––For the purposes of this section, the expression “Authority” shall include the “Appellate Tribunal]
(3) The Authority referred to in sub-section (2) shall exercise such powers and discharge such functions as may be prescribed.
1[(3A) Where the Authority referred to in sub-section (2), after holding examination as required under the said sub-section comes to the conclusion that any registered person has profiteered under sub-section (1), such person shall be liable to pay penalty equivalent to ten per cent. of the amount so profiteered:
Provided that no penalty shall be leviable if the profiteered amount is deposited within thirty days of the date of passing of the order by the Authority.
Explanation.-For the purposes of this section, the expression "profiteered" shall mean the amount determined on account of not passing the benefit of reduction in rate of tax on supply of goods or services or both or the benefit of input tax credit to the recipient by way of commensurate reduction in the price of the goods or services or both]
* Enforced w.e.f. 1st July, 2017.
** Kindly also refer to Notification No. 65/2020 – CT dated 1st Sept., 2020 and Notification No. 91/2020 – CT dated 14th Dec., 2020 (w.e.f. 01.12.2020).
1. Inserted by s.112 of The Finance (No. 2) Act, 2019 (No. 23 of 2019) - Brought into force w.e.f. 01st January, 2020 vide Notification No. 1/2020-C.T., dated 1-1-2020.
2. Inserted by section 148 of The Finance Act (No. 2) Act, 2024 No. 15 of 2024 dated 16.08.2024.
Questions to answer on the file
Questions a reviewer answers from the engagement file, grouped by the part of the section they come from. They describe what the section asks; they do not decide it.
Scope the section as a whole
Questions to answer on the file4 questions
The benefit sub-section (1) speaks of 171(1) opening words
Questions to answer on the file4 questions
Passing it on by a commensurate reduction in prices 171(1) closing words
Questions to answer on the file4 questions
The Authority and the examination under sub-section (2) 171(2) with its proviso and Explanations 1 and 2
Questions to answer on the file7 questions
The powers and functions of the Authority 171(3)
Questions to answer on the file3 questions
The penalty under sub-section (3A) 171(3A) with its proviso and its Explanation
Questions to answer on the file8 questions
Amendment history
The CBIC text carries 4 footnotes. The table gives each in the source's own terms. Effective dates are as the footnotes state them.[1]
| Note | Change | Instrument | Effective from |
|---|---|---|---|
| records the commencement of the section; it changes no word of it | the notification enforcing the section | w.e.f. 1st July, 2017 | |
| points the reader at two notifications; it changes no word of the section | Notification No. 65/2020 - CT dated 1st Sept., 2020 and Notification No. 91/2020 - CT dated 14th Dec., 2020[2][3] | the second is marked w.e.f. 01.12.2020 | |
| 1 | inserted sub-section (3A) with its proviso and its Explanation | s.112 of The Finance (No. 2) Act, 2019 (No. 23 of 2019)[4][5] | w.e.f. 01st January, 2020 vide Notification No. 1/2020-C.T., dated 1-1-2020 |
| 2 | inserted the proviso to sub-section (2) and Explanations 1 and 2 | section 148 of The Finance Act (No. 2) Act, 2024 (No. 15 of 2024) dated 16.08.2024[6] | not stated in the pull; the footnote gives only the date of the Act |
Relationship with other provisions
| Provision | Connection | Words that tie them |
|---|---|---|
| Section 2 | 171(1) defined by Section 2 clause (93) | 171(1) "shall be passed on to the recipient" |
| Section 2 | 171(1) defined by Section 2 clause (63) | 171(1) "or the benefit of input tax credit" |
| Section 2 | 171(2) defined by Section 2 clause (36) | 171(2) "on recommendations of the Council" |
| Section 109 | Explanation 2 same as Section 109 | Explanation 2 "For the purposes of this section, the expression “Authority” shall include the “Appellate Tribunal" |
| Section 2 | 171(3) defined by Section 2 clause (87) | 171(3) "as may be prescribed" |
| Section 109 | Section 109 requires 171(2) | 109(1) "adjudicating the cases referred to in sub-section (2) of section 171, if so notified under the said section" |
Circulars and notifications
Circulars and notifications in the CBIC repository that cite this section, newest first, by number, date and subject. A listing here does not say what an instrument decides; read the instrument.
Notifications (9)
| Number | Date | Subject |
|---|---|---|
| Notification No. 18/2024-Central Tax | 30 September 2024 | Seeks to notify Principal Bench of GST Appellate Tribunal to hear cases of anti-profiteering made under this section |
| Notification No. 19/2024-Central Tax | 30 September 2024 | Notification under Section 171 of CGST Act to provide for the sunset date. made under this section |
| Notification No. 23/2022-Central Tax | 23 November 2022 | Seeks to empower the Competition Commission of India to handle anti-profiteering cases under CGST Act, 2017 with effect from 01.12.2022. made under this section |
| Notification No. 24/2022-Central Tax | 23 November 2022 | Seeks to make fourth amendment (2022) to CGST Rules with effect from 01.12.2022. |
| Notification No. 65/2020-Central Tax | 1 September 2020 | Seeks to amend notification no. 35/2020-Central Tax dt. 03.04.2020 to extend due date of compliance under Section 171 which falls during the period from "20.03.2020 to 29.11.2020" till 30.11.2020. |
| Notification No. 31/2019-Central Tax | 28 June 2019 | Seeks to carry out changes in the CGST Rules, 2017. amended by a later instrument |
| Notification No. 14/2018-Central Tax | 23 March 2018 | Amending the CGST Rules, 2017(Third Amendment Rules, 2018). |
| Notification No. 10/2017-Central Tax | 28 June 2017 | Seeks to amend CGST Rules notification no 3/2017-Central Tax dt 19.06.2017 amended by a later instrument |
| Notification No. 07/2017-Central Tax | 27 June 2017 | Notification No. 7/2017- Central Tax amending Notification No. 3/2017- Central Tax has been issued |
Unsettled questions
The words of section 171 do not answer these questions. Where one decides a matter on the file, the answer depends on the position taken on it.
- Is a reduction in rate of tax under sub-section (1) confined to a fall in the rate of tax notified for the supply itself, or does it reach a change that lowers the tax borne on the supply in some other way? The sub-section states no test and the Act defines neither the expression nor "rate of tax".
- What makes credit available to a supplier "the benefit of input tax credit" that sub-section (1) requires to be passed on? The Act defines input tax credit and says nothing about what the benefit of it is, or when such a benefit arises.
- On whom does sub-section (1) put the obligation to pass the benefit on?
- At what level is the commensurate reduction in prices to be tested — the individual supply, the unit of the good or service, the recipient, or the registration as a whole — and over what period is the comparison run? Sub-section (1) fixes neither.
See also
- Section 109 of the CGST Act, 2017: constitution of Appellate Tribunal and Benches thereof
- Rule 21 of the CGST Rules, 2017: registration to be cancelled in certain cases
References
- Central Board of Indirect Taxes and Customs. "Section 171. Anti-profiteering measure". Central Goods and Services Tax Act, 2017, CBIC tax information portal, with amendment footnotes 1 to 4. Retrieved 17 September 2026.
- Notification No. 65/2020-Central Tax, dated 1 September 2020: Seeks to amend notification no. 35/2020-Central Tax dt. 03.04.2020 to extend due date of compliance under Section 171 which falls during the period from "20.03.2020 to 29.11.2020" till 30.11.2020. Cited in CBIC footnote `**`.
- Notification No. 91/2020-Central Tax, dated 14 December 2020: Seeks to extend the due dates for compliances and actions in respect of anti-profiteering measures under GST till 31.03.2021. Cited in CBIC footnote `**`.
- The Finance (No. 2) Act, 2019. Cited in CBIC footnote 1.
- Notification No. 01/2020-Central Tax, dated 1 January 2020: Seeks to bring into force certain provisions of the Finance (No. 2) Act, 2019 to amend the CGST Act, 2017. Cited in CBIC footnote 1.
- The Finance Act (No. 2) Act, 2024. Cited in CBIC footnote 2.
External links
- CGST Act, 2017, Section 171 on the CBIC tax information portal