DGAP Report Accepted; No Section 171 Contravention Found by GSTAT

DG Anti Profiteering Vs Ireo Grace Realtech Pvt. Ltd. (GSTAT)

The proceedings arose from the DGAP investigation report dated 28.10.2024 under Section 171 of the Central Goods and Services Tax Act, 2017 (CGST Act), read with Rule 129 of the CGST Rules, 2017. The investigation followed a reference from the Standing Committee on Anti-Profiteering based on a complaint by Sh. Sandeep Bansal, Ms. Pratibha Bansal and Ms. Nupur Bansal alleging that M/s Ireo Grace Realtech Pvt. Ltd. had failed to pass on the benefit of Input Tax Credit (ITC) through a commensurate reduction in price after GST came into effect from 01.07.2017 in respect of the project “The Corridors” at Sector 67A, Gurgaon, Haryana.

An earlier DGAP report dated 21.02.2019 had concluded that the Respondent had contravened Section 171. The matter was remanded to the DGAP under Rule 133(4) through Investigation Order No. 14/2019 dated 21.10.2019, and a further report was submitted on 12.02.2020. The CCI subsequently directed further examination and, following the judgment of the Hon’ble High Court of Delhi dated 29.01.2024 in W.P.(C) No. 7743/2019 and connected matters, directed the DGAP on 07.05.2024 to re-investigate the matter in light of that judgment.

In its report dated 28.10.2024, the DGAP found that the ratio of ITC availed to purchase value was 4.66% in the pre-GST period and 4.54% in the post-GST period, representing a difference of (-)0.12%. The DGAP therefore observed that the ratio had not increased after introduction of GST and concluded that no additional ITC benefit had accrued to the Respondent.

A notice dated 30.10.2025 was issued to the Applicants with intimation to the Respondent, followed by further opportunities through orders dated 08.01.2026, 23.01.2026 and 28.01.2026. No response was received. At the hearing on 10.02.2026, Mrs. Geetika Chib, Additional Assistant Director, appeared for the DGAP, while none appeared for the Applicants or Respondent. The supplied material further records that an email dated 17.10.2026 from one Applicant informed the Tribunal that the disputes had been amicably resolved through settlement.

The Tribunal accepted the DGAP’s investigation report dated 28.10.2024 and held that there was no contravention of Section 171 of the CGST Act, 2017. The proceedings were accordingly disposed of, with directions to supply a copy of the order to the Applicants, Respondent and concerned Commissionerate.

Facts and Background

The Applicants alleged that the Respondent had not passed on the benefit of ITC by way of commensurate reduction in price following implementation of GST with effect from 01.07.2017. The allegation related to construction services supplied in the project “The Corridors”, situated at Sector 67A, Gurgaon, Haryana.

The proceedings were initiated following a reference from the Standing Committee on Anti-Profiteering. The DGAP was required to examine the allegation and determine whether the Respondent had contravened Section 171 of the CGST Act, 2017.

Procedural History of Anti-Profiteering Proceedings

Initial DGAP Investigation

The DGAP furnished an investigation report dated 21.02.2019 under Rule 129(6) of the CGST Rules to the erstwhile National Anti-Profiteering Authority. The report concluded that the Respondent had contravened Section 171 of the CGST Act, 2017.

Remand and Further Investigation

The matter was remanded to the DGAP under Rule 133(4) through Investigation Order No. 14/2019 dated 21.10.2019 for fresh investigation and submission of a comprehensive report. The DGAP resubmitted its report on 12.02.2020.

The CCI thereafter directed the DGAP to further examine the Respondent’s claim regarding passing on of ITC benefit and, if necessary, recompute the profiteered amount relating to “The Corridors”.

Re-investigation Following Delhi High Court Judgment

The supplied material records that the Hon’ble High Court of Delhi, in W.P.(C) No. 7743/2019 and connected matters, vide judgment dated 29.01.2024, held that the methodology applied to the real estate sector hitherto was faulty. The CCI consequently directed the DGAP, by letter dated 07.05.2024, to re-investigate the matter in light of that judgment.

The judgment referred to in the supplied material is also available through TaxGuru’s publication concerning the Delhi High Court proceedings in W.P.(C) No. 7743/2019.

DGAP Report Dated 28.10.2024

The DGAP compared the percentage ratio of ITC availed to purchase value during the pre-GST and post-GST periods. The ratio was reported as 4.66% for the pre-GST period and 4.54% for the post-GST period.

The difference between the two ratios was (-)0.12%. On this basis, the DGAP observed that the percentage ratio of ITC to purchase value had not increased from the pre-GST period to the post-GST period. It therefore concluded that no additional benefit of ITC had accrued to the Respondent after introduction of GST.

The supplied material is consistent with other TaxGuru coverage concerning Section 171 proceedings where the post-GST ITC ratio was lower than the pre-GST ratio. A relevant TaxGuru publication is No Anti-Profiteering Violation Where Post-GST ITC Ratio Lower Than Pre-GST: GSTAT.

Hearing and Submissions Before GSTAT

A notice dated 30.10.2025 was issued to the Applicants, with intimation to the Respondent, seeking written submissions on the DGAP Report. Further opportunities were granted through orders dated 08.01.2026, 23.01.2026 and 28.01.2026, but no response was received.

At the hearing held on 10.02.2026, Mrs. Geetika Chib, Additional Assistant Director, appeared on behalf of the DGAP. None appeared on behalf of the Applicants or the Respondent. The supplied material does not record any substantive submissions made by the Applicants or Respondent before the Tribunal.

The material additionally records an email dated 17.10.2026 from one of the Applicants stating that the disputes between the parties had been amicably resolved through settlement. This date and statement are reproduced as supplied.

Relevant Statutory Provisions Governing Anti-Profiteering

Section 171 of the CGST Act, 2017

The proceedings arose under Section 171 of the CGST Act, 2017 concerning the alleged failure to pass on the benefit of ITC by way of commensurate reduction in price. The DGAP’s investigation and the Tribunal’s decision were specifically concerned with whether the Respondent had contravened this provision.

TaxGuru has also published material concerning the anti-profiteering framework under Section 171, including Final GST Anti-profiteering Rules (19.06.2017).

Rule 129 of the CGST Rules, 2017

The investigation was undertaken under Rule 129 of the CGST Rules. The supplied material specifically refers to the DGAP report dated 21.02.2019 under Rule 129(6), while the later proceedings involved re-investigation following directions issued under the anti-profiteering framework.

Rule 133(4) of the CGST Rules, 2017

The matter was remanded to the DGAP under Rule 133(4) through Investigation Order No. 14/2019 dated 21.10.2019. The CCI subsequently directed further examination of the Respondent’s claim regarding passing on of ITC benefit and, if necessary, recomputation of the profiteered amount.

GSTAT Findings: No Additional ITC Benefit Accrued

The Tribunal accepted the investigation report dated 28.10.2024 submitted by the DGAP. The decisive finding recorded in the supplied order was that the ratio of ITC availed to purchase value had not increased after introduction of GST: it was 4.66% in the pre-GST period compared with 4.54% in the post-GST period.

On that basis, the Tribunal held that there was no contravention of Section 171 of the CGST Act, 2017. The Tribunal did not record any contrary substantive finding or any determination of profiteering against the Respondent in the supplied order.

Final Decision of GSTAT

The Tribunal accepted the DGAP investigation report dated 28.10.2024 and held that there was no contravention of Section 171 of the CGST Act, 2017.

Accordingly, the proceedings were disposed of. The Tribunal directed that a copy of the order be supplied to the Applicants, the Respondent and the concerned Commissionerate. The order was pronounced in open court.

Cases Discussed

• Hon’ble High Court of Delhi, W.P.(C) No. 7743/2019 and connected matters, judgment dated 29.01.2024

FULL TEXT OF THE JUDGMENT/ORDER OF GSTAT

1. The proceedings in the present matter arise out of the investigation report dated 28.10.2024 (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 reference received from the Standing Committee on Anti-Profiteering, based on a complaint filed by Sh. Sandeep Bansal, Ms. Pratibha Bansal and Ms. Nupur Bansal, residents of 7/902, Vipul Belmonte, Golf Course Road, Sector-53, Gurgaon, Haryana–122002 (hereinafter referred to as “the Applicants”), alleging profiteering in respect of construction services supplied by M/s Ireo Grace Realtech Pvt. Ltd., having its registered office at Ireo Campus, Archview Drive, Ireo City, Golf Course Extension Road, Gurgaon–122101 (hereinafter referred to as “the Respondent”). It

was alleged that the Respondent had failed to pass on the benefit of Input Tax Credit (ITC) to the Applicants by way of commensurate reduction in price after the implementation of GST w.e.f. 01.07.2017, in respect of the project “The Corridors”, situated at Sector 67A, Gurgaon, Haryana.

2. Accordingly, the DGAP furnished an investigation report dated 21.02.2019 under Rule 129(6) of the CGST Rules to the erstwhile National Anti-Profiteering Authority, concluding that the Respondent had contravened the provisions of Section 171 of the CGST Act, 2017.

3. The matter was remanded to the DGAP under Rule 133(4) vide Investigation Order No. 14/2019 dated 21.10.2019 for fresh investigation and submission of a comprehensive report, which was resubmitted on 12.02.2020. Upon consideration thereof, the CCI again directed the DGAP under Rule 133(4) to further examine the Respondent’s claim of passing on ITC benefit and, if necessary, to recompute the profiteered amount in respect of the project “The Corridors”. Meanwhile, the Hon’ble High Court of Delhi, in W.P.(C) No. 7743/2019 and connected matters, vide judgment dated 29.01.2024, held that the methodology applied to the real estate sector hitherto was faulty.

4. Subsequently, the CCI, vide letter dated 07.05.2024, directed the DGAP to re-investigate the present case in light of the judgment of the Hon’ble High Court of Delhi dated 29.01.2024.

5. The DGAP, in its report dated 28.10.2024, stated that the percentage ratio of ITC availed to the purchase value in the pre-GST period was 4.66%, whereas in the post-GST period it was 4.54%. The difference in the ratio was (-)0.12%. Accordingly, it was observed that the percentage ratio of ITC to purchase value had not increased from the pre-GST period to the post-GST period. The DGAP,

therefore, concluded that no additional benefit of ITC had accrued to the Respondent after the introduction of GST.

6. A notice dated 30.10.2025 was issued to the Applicants, with intimation to the Respondent, calling upon them to file written submissions on the DGAP Report. Thereafter, vide orders dated 08.01.2026, 23.01.2026 and 28.01.2026, further opportunities were granted; however, no response was received. The hearing in the matter was held on 10.02.2026. Mrs. Geetika Chib, Additional Assistant Director, appeared on behalf of the DGAP. None appeared on behalf of the Applicants or the Respondent. However, vide email dated 17.10.2026, received from one of the Applicants, it was informed that the disputes between the parties had been amicably resolved through settlement.

7. In view of the foregoing, the Tribunal accepts the investigation report dated 28.10.2024 submitted by the DGAP and holds that there is no contravention of the provisions of Section 171 of the CGST Act, 2017.

8. Accordingly, the present proceedings are disposed of.

9. A copy of this Order shall be supplied to the Applicants, the Respondent, and the concerned Commissionerate.

10. The Order is pronounced in open court today.