DG Anti Profiteering Vs Angelo’s VNCT Ventures LLP (GSTAT)
A complaint was filed alleging profiteering in relation to construction services supplied in the project “VNCT Lotus Villas,” claiming that the developer failed to pass on the benefit of Input Tax Credit (ITC) to a villa purchaser after the introduction of GST with effect from 1 July 2017, in violation of Section 171 of the Central Goods and Services Tax Act, 2017. The Standing Committee examined the complaint and referred it to the Director General of Anti-Profiteering (DGAP) for investigation. The DGAP initiated proceedings, issued notice to the respondent, and examined replies and documents submitted.
The DGAP noted that the respondent had opted for the concessional GST scheme of 5% without ITC from 1 April 2019 and had availed ITC only up to FY 2018–19. Accordingly, profiteering was computed only up to 31 March 2019. By comparing the ratio of credit availed to purchase value in the pre-GST period (6.37%) and post-GST period (16.96%), the DGAP found an incremental benefit of 10.59%. Based on the purchase value of goods and services during the post-GST period, total additional ITC benefit was calculated at ₹50,78,550. After allocating this benefit per square foot and across the saleable area, the DGAP determined profiteering of ₹44,06,288 plus GST of ₹5,28,754, aggregating to ₹49,35,042. All recipients were stated to be identifiable. On this basis, the DGAP concluded that the respondent had contravened Section 171 of the CGST Act.
