DG Anti Profiteering Vs Laureate Buildwell Pvt. Ltd. (GSTAT)
The GST Appellate Tribunal (GSTAT) considered a matter arising from an investigation conducted by the Directorate General of Anti-Profiteering (DGAP) against a real estate developer regarding alleged violation of Section 171 of the CGST Act. The DGAP concluded that the Respondent had profiteered an amount of ₹5.95 crore by not fully passing on Input Tax Credit (ITC) benefits to certain homebuyers.
The DGAP’s report compared the ratio of credit availed to purchase value during the pre-GST and post-GST periods. According to the report, the ratio increased from 6.48% in the pre-GST period to 16.91% in the post-GST period, resulting in an additional ITC benefit of 10.43%. Based on the post-GST purchase value and saleable area, the DGAP computed total profiteering at ₹22.78 crore plus GST of ₹2.73 crore, aggregating to ₹25.52 crore.
The DGAP further reported that the Respondent claimed to have passed on ITC benefits amounting to ₹40.69 crore. However, it found that 187 buyers had allegedly received less than the profiteering amount attributable to them, leaving a balance benefit of ₹5.95 crore still required to be passed on.
The Respondent contested the findings and filed written submissions. It argued that full and commensurate ITC benefits had already been passed on to all eligible buyers, including post-occupancy certificate buyers, through concessions reflected in receipts and financial records. The Respondent also claimed that the DGAP’s methodology was flawed and that the alleged profiteering amount was overstated.
