DG Anti Profiteering (Director General of Anti-Profiteering) v. Lucknow Development Authority (Kritika and Swati Project) [Section 133(4)] (GSTAT)
The proceedings arose from a complaint alleging profiteering in violation of Section 171 of the Central Goods and Services Tax Act, 2017, on account of failure to pass on Input Tax Credit (ITC) benefits through commensurate price reduction in a residential housing project.
The complaint was examined by the Standing Committee on Anti-profiteering and referred to the Director General of Anti-Profiteering (DGAP) for investigation. The investigation covered the period from 1 July 2017 to 20 March 2020. The Respondent participated in the investigation and submitted relevant documents.
The DGAP noted that the Respondent was a statutory authority established under the Uttar Pradesh Urban Planning and Development Act, 1973 and operated on a “not for profit” basis. It was observed that the Respondent had reduced the prices of units and passed on ITC benefits to allottees through an office order, resulting in a reduction in flat costs. The Respondent had not availed CENVAT credit in the pre-GST regime but availed ITC under GST.
The project comprised 864 units, out of which 145 unsold units at the time of issuance of the Occupation Certificate were excluded from investigation. Thus, 719 units were considered. The DGAP calculated that the ratio of ITC to purchase value increased from 0% in the pre-GST period to 12.38% in the post-GST period. Based on this increase, total additional ITC benefit was computed, leading to a determination of profiteering.
