DG Anti Profiteering Vs Samridhi Realty Pvt. Ltd. (GSTAT)
The proceedings before the GST Appellate Tribunal (GSTAT) arose from a complaint alleging profiteering under Section 171 of the CGST Act, 2017 in respect of a real estate project. The complainant alleged that the developer failed to pass on the benefit of input tax credit (ITC) by way of commensurate reduction in price after the introduction of GST from 01.07.2017. The matter was initially examined by the Standing Committee and referred to the Director General of Anti-Profiteering (DGAP) for investigation.
The DGAP conducted an investigation and submitted a report. Subsequently, the matter underwent reinvestigation due to directions from authorities and judicial developments affecting the methodology. The DGAP recalculated the benefit of ITC by comparing pre-GST and post-GST periods and found that the ITC ratio increased from 10.03% to 14.22%, resulting in additional benefit of 4.19%. Based on this, profiteering was initially computed at ₹5.88 crore along with GST.
However, the DGAP also examined whether the benefit had already been passed on to buyers. It was found that the developer had passed on ITC benefits amounting to ₹16.45 crore to 935 homebuyers, which exceeded the computed profiteering amount. Accordingly, there was no further benefit required to be passed on to these buyers. Additionally, no benefit was required for buyers who purchased units after issuance of the occupancy certificate.
