Case Law Details
DGAP Vs AXIS Infratech LLP (GSTAT)
The proceedings arose from an investigation report dated 28.11.2024 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, 2017. The investigation was initiated pursuant to a reference by the Standing Committee on Anti-Profiteering based on an application alleging that the Respondent, a real estate developer of the project “24K” at Vadodara, Gujarat, had failed to pass on the benefit of Input Tax Credit (ITC) to buyers through commensurate reduction in prices.
The DGAP identified 11 homebuyers whose units were booked prior to the issuance of the Completion Certificate dated 16.05.2019. These buyers were held eligible to receive ITC benefits under Section 171 of the CGST Act. Nine units sold after the Completion Certificate were excluded from the investigation. The buyers’ flat areas ranged between 2249.676 sq. ft. and 3207.672 sq. ft., and bookings were made between 05.10.2016 and 12.10.2018.
Applying the area-based methodology mandated by the Delhi High Court in W.P.C. No. 7743/2019, the DGAP calculated an incremental ITC ratio increase of 2.43% (post-GST ratio of 7.88% minus pre-GST ratio of 5.45%). This ratio was applied to the post-GST purchase value of ₹17,29,33,128/-, resulting in total project savings of ₹42,02,275/-. Based on the total sold area of 25,705 sq. ft., the per sq. ft. benefit was determined at ₹89.58.
On this basis, the total anti-profiteering amount required to be passed on to the 11 eligible buyers was computed at ₹23,02,653/- (base amount) plus GST at 12% amounting to ₹2,76,318/-, aggregating to ₹25,78,971/-.
The DGAP further verified that the Respondent had already passed on ITC benefits totaling ₹42,03,560/- across the 11 buyers, supported by buyer acknowledgments and final invoices. This amount exceeded the computed anti-profiteering liability in most cases, resulting in excess benefits to 10 buyers. However, an amount of ₹17,829/- was found short in respect of one buyer, representing the difference between the computed profiteering of ₹3,21,793/- and the benefit already passed on of ₹3,03,964/-.
The Tribunal issued notice to the Respondent seeking explanation as to why the DGAP report should not be accepted and liability fixed under Section 171 of the CGST Act. In reply dated 15.12.2025, the Respondent accepted the findings of the DGAP report and submitted that ₹17,829/- had been transferred to the concerned buyer via NEFT on 13.12.2025, along with confirmation of receipt.
At the hearing on 29.01.2026, the DGAP’s representative confirmed that the Respondent had duly passed on the ITC benefits to eligible recipients and had also discharged the balance liability of ₹17,829/-. It was requested that the proceedings be closed.
Upon examining the investigation report, compliance submissions, and buyer confirmations, the Tribunal observed that although profiteering was initially determined at ₹25,78,971/- based on the incremental ITC ratio of 2.43%, the Respondent had in fact passed on a total benefit of ₹42,03,560/- to all 11 eligible homebuyers. Further, the shortfall of ₹17,829/- had been duly transferred.
The Tribunal held that the Respondent had fully discharged its statutory obligation to pass on the benefit of ITC in accordance with Section 171 of the CGST Act, 2017. Accordingly, the DGAP’s report was accepted, and the proceedings were concluded, it being established that the Respondent had complied with the anti-profiteering provisions in respect of the “24K” project. No further action was considered warranted.
Copies of the order were directed to be forwarded to the parties concerned.
FULL TEXT OF THE JUDGMENT/ORDER OF GSTAT
1. The present proceedings emanate from the investigation report dated 28.11.2024 submitted by the Director General of Anti-Profiteering (DGAP) under the provisions of Section 171 of the Central Goods and Services Tax Act, 2017, read with Rule 129 of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the Rules). The investigation was initiated pursuant to a reference made by the Standing Committee on Anti-Profiteering on the basis of an application filed by Shri Abhay Yagnesh Desai, residing at 56, Tarang Society, B.P.C. Road, Opposite Akota Stadium, Akota, Vadodara–390020 (hereinafter referred to as the Applicant).
The Applicant alleged that M/s Axis Infratech LLP, formerly known as M/s Axis Infratech Pvt. Ltd., having its registered office at 24K, Beside PF Office, Near Ward No. 6 Office, Old Padra Road, Vadodara, Gujarat– 390020, bearing GSTIN 24ABGFA3193H1ZK (hereinafter referred to as the Respondent), had contravened the provisions of Section 171 of the CGST Act by failing to pass on the benefit of Input Tax Credit to the recipients through commensurate reduction in prices in respect of construction services supplied in its project “24K”, located at the aforesaid address.
2. The DGAP, submitted its investigation report dated 28.11.2024, wherein DGAP identified 11 specific buyers in the Respondent’s project “24K” whose units were sold prior to the issuance of the Completion Certificate on 16.05.2019, and who were entitled to the benefit of input tax credit under Section 171 of the CGST Act, 2017. These buyers, detailed in Table-A of the DGAP report, include Shri Abhay Yagnesh Desai (Flat No. 602), Shri Dhaval B Shah (Flat No. 1002), Shri Mukesh B Kewalramani (Flat No. 1101), and eight others, with their respective flat areas ranging from 2249.676 sq. ft. to 3207.672 sq. ft., all booked between 05.10.2016 and 12.10.2018. The remaining 9 units which were sold after the issuance of Completion Certificate were excluded from the investigation.
3. The DGAP computed the total anti-profiteering amount required to be passed on to these 11 eligible buyers at Rs. 23,02,653/- (base amount) plus GST @12% amounting to Rs. 2,76,318/-, aggregating to Rs. 25,78,971/- (Rupees Twenty-Five Lakhs Seventy-Eight Thousand Nine Hundred Seventy-One only). This quantification followed the area-based methodology mandated by the Hon’ble Delhi High Court in W.P.C. No. 7743/2019, deriving from an incremental ITC ratio increase of 2.43% (post-GST ratio 7.88% minus pre-GST ratio 5.45%) applied to the post-GST purchase value of Rs. 17,29,33,128/-, yielding total project savings of Rs. 42,02,275/- and per sq. ft. benefit of Rs. 89.58/- over the total sold area of 25,705 sq. ft. prior to Completion Certificate.
4. The DGAP further verified that the Respondent had already passed on ITC benefits exceeding the computed amount in most cases, totaling Rs. 42,03,560/- across the 11 buyers, as confirmed through buyer acknowledgments and final invoices, resulting in net excess benefits for 10 buyers. DGAP further observed that benefit of Rs. 17,829/- is yet to be passed on to Shri Mukesh B Kewalramani (Flat No. 1101), representing the difference between the computed profiteering of Rs. 3,21,793/- and the benefit already passed on of Rs. 3,03,964/-.
5. The Above report of the DGAP dated 28.11.2024 considered by this Tribunal and a notice dated 29.10.2025 was issued to the Respondent (under the intimation of the original applicant) to explain why the above referred report of the DGAP should not be accepted and why his liability for violation of the provisions of Section 171 of the CGST Act, 2017 should not be fixed. In reply dated 15.12.2025, the Respondent had submitted that he accepted the finding of the DGAP’s report and also submitted that they have transferred Rs. 17,829/- to Shri Mukesh B Kewalramani, owner of Flat No. 1101, via NEFT transfer. Further an confirmation email for receiving the amount has also been received from Sh. Mukesh B. Kewalramani.
6. The matter was heard on 29.01.2026. None appeared on behalf of the Respondent or the Applicant. Ms. Geetika Chib, AAD, assisted by Sh. Awanindra Kumar, Inspector appeared on behalf of the DGAP. The Authorized Representative of the DGAP submitted that the Respondent had duly passed on the benefit of Input Tax Credit to the eligible recipients, which has been duly verified by the DGAP. It was further submitted that the Respondent has also discharged his liability of ₹17,829/- in the matter of Sh. Mukesh B. Kewalramani. In view of the above, it was requested that the present proceedings may be closed.
7. The investigation report dated 28.11.2024 submitted by the DGAP has been carefully examined along with the Respondent’s compliance submission dated 15.12.2025, the buyer-wise confirmations reflected in Table-E of the DGAP Report. It is observed that although profiteering was initially determined to the extent of Rs. 25,78,971/- (comprising base amount of Rs. 23,02,653/- and GST of Rs. 2,76,318/-) on account of an incremental Input Tax Credit ratio of 2.43%, the Respondent has passed on a total benefit amounting to Rs. 42,03,560/- to all 11 eligible homebuyers. Further, with respect to the amount of Rs. 17,829/- that was required to be passed on to Shri Mukesh B. Kewalramani, it is observed that the Respondent has duly transferred the said amount through NEFT reference no. 1370645417 dated 13.12.2025. Accordingly, it is held that the Respondent has fully discharged its statutory obligation to pass on the benefit of Input Tax Credit to the eligible recipient in accordance with the provisions of Section 171 of the CGST Act, 2017.
8. In light of the findings recorded hereinabove, the investigation report dated 28.11.2024 submitted by the Director General of Anti-Profiteering is accepted. Accordingly, the proceedings arising from the complaint filed by Shri Abhay Yagnesh Desai against M/s Axis Infratech LLP are hereby concluded, it being conclusively established that the Respondent has fully complied with the mandate of Section 171 of the CGST Act, 2017 in respect of construction services provided in the “24K” project at Vadodara, Gujarat, and that no further action is warranted.
9. A copy of this order shall be forwarded to the interested parties i.e. to the Respondent, Applicant Shri Abhay Yagnesh Desai, Director General of Anti-Profiteering, and jurisdictional CGST/SGST Commissioners, Gujarat for necessary action.
10. Order pronounced in the Open Court.
Author Bio
