DG Anti Profiteering Vs Vasavi And GP Infra LLP (GSTAT)
The Goods and Services Tax Appellate Tribunal (GSTAT) examined allegations of profiteering against a real estate developer in relation to its residential project “Vasavi GP Trends” in Telangana. The proceedings originated from complaints filed under Rule 128 of the CGST Rules, 2017, alleging that the developer failed to pass on the benefit of additional Input Tax Credit (ITC) available after implementation of GST from 01.07.2017.
The Directorate General of Anti-Profiteering (DGAP) initially investigated the matter and submitted a report in February 2023. Subsequently, the Competition Commission of India directed re-examination of sale deeds and agreements, followed by a further re-investigation in light of the Delhi High Court judgment in Reckitt Benckiser India Pvt. Ltd. v. Union of India.
In its report dated 09.10.2024, the DGAP concluded that the developer had obtained additional ITC benefits in the post-GST regime and had not fully passed on the same to buyers through reduction in prices. The DGAP initially quantified profiteering at ₹6.02 crore, out of which ₹3.48 crore was found to have already been passed on, leaving a balance of ₹2.54 crore plus GST.
The Respondent challenged the methodology and raised issues regarding exclusion of input service credit, treatment of benefits allegedly passed on to customers, and whether GST could be levied again on the profiteered amount. The GSTAT remanded limited issues to the DGAP for reconsideration, including whether actual ITC on services should be considered, whether benefits denied by certain buyers through emails had in fact been passed on, and whether post-GST pricing already embedded the ITC benefit.
