Case Law Details
DG Anti Profiteering Vs Pacifica Developers Pvt. Ltd. (GSTAT)
The proceedings arose from an investigation report dated 06.12.2024 submitted by the Director General of Anti-Profiteering (DGAP) under Section 171 of the Central Goods and Services Tax Act, 2017 read with Rule 129 of the CGST Rules. The investigation was initiated on the basis of a complaint dated 16.10.2019 alleging that the Respondent had failed to pass on the benefit of input tax credit (ITC) by way of commensurate reduction in price after implementation of GST with effect from 01.07.2017, in respect of a residential project named “Reflections.”
Earlier, the DGAP had submitted a report dated 31.12.2020 under Rule 129(6), which was pending decision before the CCI. Subsequently, in Writ Petition No. 7743/2019 and connected matters, the Hon’ble High Court of Delhi, by judgment dated 29.01.2024, observed that the methodology adopted for the real estate sector was faulty. Taking note of these observations, the CCI, vide letter dated 21.03.2024, directed the DGAP to conduct a re-investigation under Rule 129 of the CGST Rules.
In its report dated 06.12.2024, the DGAP examined the residential project “Reflections,” comprising 468 residential units across nine towers (Towers A to I), each having twelve floors and a penthouse floor. The project commenced in 2012 and received its Occupancy Certificate on 17.09.2018. The investigation was confined strictly to the construction services in respect of this project.
The DGAP analyzed the percentage ratio of ITC availed to purchase value in the pre-GST and post-GST periods. It found that the ratio in the pre-GST period was 7.09%, while in the post-GST period it was 6.44%. The difference between the two ratios was calculated as -0.65%. On this basis, the DGAP concluded that the percentage ratio of ITC to purchase value had not increased after the introduction of GST and that no additional ITC benefit had accrued to the Respondent.
A notice dated 11.11.2025 was issued to the Applicant, with intimation to the Respondent, seeking written submissions on the DGAP report. A personal hearing was held on 09.01.2026, but neither party appeared or filed submissions. A further opportunity was granted, and the case was heard again on 03.02.2026. Once again, neither the Applicant nor the Respondent appeared or filed any reply.
In view of the above, the Tribunal accepted the investigation report dated 06.12.2024 and held that there was no contravention of Section 171 of the CGST Act, 2017. The matter was accordingly disposed of. A copy of the order was directed to be supplied to the Applicant, the Respondent, and the concerned CGST/SGST Commissionerate for necessary action. The order was pronounced in open court.
FULL TEXT OF THE JUDGMENT/ORDER OF GSTAT
The proceedings in the present case arise out of the investigation report dated 06.12.2024 (hereinafter referred to as the “DGAP Report”) submitted by the Director General of Anti-Profiteering (hereinafter referred to as the “DGAP”) under Section 171 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the “CGST Act”), read with Rule 129 of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the “CGST Rules”). The investigation was initiated pursuant to a complaint referred by the Standing Committee on Anti-Profiteering on an application dated 16.10.2019 filed by Ms. Rachna Sharma, residing at 675, Janta Nagar, Chand Kheda, Ahmedabad-382424 (hereinafter referred to as the “Applicant”), alleging profiteering in respect of construction services supplied by M/s. Pacifica Developers Pvt. Ltd., having its address at 33, Amrapalas Bungalows, Ramdeo Nagar, Ahmedabad-380015 (hereinafter referred to as the “Respondent”). It was alleged that the Respondent had failed to pass on the benefit of input tax credit to the Applicant by way of commensurate reduction in price after implementation of GST with effect from 01.07.2017, in terms of Section 171 of the CGST Act, in respect of the Respondent’s project namely “Reflections”.
2. The Directorate General of Anti-Profiteering (DGAP) investigated the project “Reflections” executed by M/s. Pacifica Developers Pvt. Ltd. and submitted its investigation report dated 31.12.2020 under Rule 129(6) of the Central Goods and Services Tax Rules, 2017. The report dated 31.12.2020 sent by the DGAP was pending for decision by the CCI. Meanwhile, in the case of Writ Petition No. 7743/2019 and other connected matters, the Hon’ble High Court of Delhi in judgement dated 29.01.2024 reckoned that the methodology for the real estate sector hitherto was faulty. Subsequently, taking cognizance of the observations of the Hon’ble High Court vide the impugned order dated 29.01.2024, the CCI vide letter dated 21.03.2024 had directed the DGAP for re-investigation of this case under Rule 129 of the CGST Rules, 2017.
3. The DGAP in its report dated 06.12.2024 submitted that the Respondent developed a residential apartment project near the Vaishnodevi Temple on SG Highway, Ahmedabad, known as “Reflections”, comprising a total of 468 residential units across nine towers (designated Towers A to I), each consisting of twelve floors along with a penthouse floor. The present case pertains to the supply of construction services in respect of this project alone, in which the Applicant had booked her unit, and the investigation is strictly confined thereto, the project having commenced in the year 2012 and having received the Occupancy Certificate on 17.09.2018.
4. The DGAP vide the present report stated that percentage ratio of Credit Availed to purchase value in pre-GST period is 7.09% and in post-GST period is 6.44%. The difference in the ratio is calculated as -0.65%. Therefore, it was evident that the percentage ratio of ITC to purchase value has not increased from pre-GST period to the post-GST period. Therefore, DGAP concluded that no benefit of additional ITC has accrued to the Respondent after the introduction of GST.
5. A notice dated 11.11.2025 was issued to the Applicant, with intimation to the Respondent, calling upon them to file written submissions on the report of the DGAP. Personal Hearing in the case was held on 09.01.2026. Neither the Applicant nor the Respondent filed any written submissions or appeared on the date of the hearing. The Applicant and the Respondent were given another opportunity to file written submissions, and the case was heard on 03.02.2026. The Applicant and the Respondent neither appeared nor filed any reply.
6. In view of the above, the Tribunal accepts the Investigation Report dated 06.12.2024 submitted by the DGAP, wherein it has been concluded that there is no contravention of the provisions of Section 171 of the CGST Act, 2017.
7. Accordingly, the matter is disposed of.
8. A copy of this Order shall be supplied to the Applicant and the Respondent, as well as to the concerned CGST/SGST Commissionerate for necessary action.
9. The Order is pronounced in the Open court.
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