DG Anti Profiteering Vs Nahar Homes LLP (GSTAT)
The present proceedings arose from a complaint filed under Rule 128 of the CGST Rules alleging profiteering in respect of construction services supplied in the project “F-Residences.” The complaint stated that the Respondent had not passed on the benefit of Input Tax Credit (ITC) to the buyer of Unit No. A1-801 after introduction of GST w.e.f. 01.07.2017, in terms of Section 171 of the CGST Act.
The DGAP initially investigated and submitted a report dated 10.11.2021. However, the matter was remanded for reinvestigation pursuant to directions issued following a judgment dated 29.01.2024 of the Hon’ble High Court of Delhi. A fresh report was submitted on 03.06.2025.
The DGAP observed that prior to GST, the Respondent was eligible to avail CENVAT credit of Service Tax on input services but not Central Excise duty. In the post-GST regime, the Respondent was eligible to avail ITC of GST paid on inputs and input services, as it had not opted for the new scheme. Since the Occupancy Certificate was received on 29.01.2020, profiteering was examined up to that date.
The methodology adopted involved comparing the ratio of ITC to purchase value in the pre-GST and post-GST periods. Any positive difference in availability of ITC was treated as savings to the supplier, which under Section 171 was required to be passed on to recipients by way of commensurate price reduction.
