DGAP Vs Shrivision Towers Pvt. Ltd (Shriram Greenfield) (GSTAT)
The present case before the Goods and Services Tax Appellate Tribunal arose from a complaint alleging profiteering under section 171 of the Central Goods and Services Tax Act, 2017. The Karnataka State Screening Committee received a complaint from a homebuyer alleging that the developer had not passed on the benefit of input tax credit (ITC) by way of commensurate reduction in the price of a flat booked in the project “Shriram Greenfield” after the introduction of GST with effect from 01.07.2017. The complaint was examined by the Standing Committee and referred to the Director General of Anti-Profiteering (DGAP) for detailed investigation.
During investigation, the DGAP examined documents submitted by the respondent and noted that the project consisted of two phases. Phase-I commenced in March 2015 and was completed in August 2019, while Phase-II commenced on 03.10.2017 and was completed on 30.09.2021, entirely in the post-GST period. As Phase-II was fully post-GST, it was excluded from the scope of investigation. The complainant had booked his flat in Phase-I during the post-GST period, and therefore the investigation was confined to Phase-I.
The DGAP analysed the purchase value of inputs and services and the tax credits availed during the pre-GST and post-GST periods for Phase-I. It was found that the total purchase value of inputs and services in the pre-GST period was ₹1,78,88,70,090, while in the post-GST period it was ₹1,36,55,05,946. During the pre-GST period, the respondent availed service tax credit of ₹12,70,01,316 and VAT credit of ₹14,58,21,139. In the post-GST period, GST ITC availed amounted to ₹19,89,66,636. The ratio of credit availed to purchase value was 15.25% in the pre-GST period, which reduced to 14.57% in the post-GST period. Since the ITC ratio declined after the introduction of GST, the DGAP concluded that there was no additional benefit or saving accruing to the respondent on account of GST implementation. On this basis, the DGAP held that there was no contravention of section 171 of the CGST Act.
