Excess GST Realisation Irrelevant to Profiteering Under Section 171: GSTAT

DGAP, DG Anti-Profiteering, Director General of Anti-Profiteering Vs Shreeji Infra (GSTAT)

The GST Appellate Tribunal (GSTAT), Principal Bench, considered the DGAP report dated 24.10.2024 concerning M/s Shreeji Infra’s residential project “Shree Two” at Vadodara. The project commenced on 07.01.2019, after introduction of GST, and the first booking amount was received on 21.02.2019. The proceedings arose from an application alleging that the Respondent had failed to pass on the benefit of Input Tax Credit by way of commensurate reduction in prices under Section 171 of the CGST Act, 2017. The DGAP investigated the period from 01.07.2017 to 31.03.2024 and concluded that ten affordable residential apartments had been subjected to GST at 5% although, according to the DGAP, GST at 1% without ITC was applicable. On that basis, the DGAP treated the alleged 4% excess GST realisation as savings and computed profiteering of Rs. 14,76,836/-, or Rs. 16,54,056/- including 12% GST.

The Respondent denied profiteering and submitted that it had continued with the 12% GST rate while claiming ITC and, more importantly, had itself paid GST at 12% while recovering a lesser amount from the customer. The Respondent produced payment-wise details showing GST of Rs. 3,97,800/- paid to the Government Treasury against GST of only Rs. 1,70,250/- recovered from the customer, leaving Rs. 2,27,550/- borne by the Respondent.