Anti-Profiteering Case Closed as Builder Passes More ITC Than Required

The proceedings arose from a complaint alleging profiteering by Arkade Developers Pvt. Ltd. in its real estate project “Arkade Earth – Bluebell”, Mumbai, for allegedly not passing on the benefit of additional input tax credit (ITC) under GST. The Standing Committee on Anti-Profiteering referred the matter to the Director General of Anti-Profiteering (DGAP), which initially found contravention. Based on Reckitt Benckiser India Pvt. Ltd., the DGAP was directed to reinvestigate the matter using a project-specific, area-based methodology.

DGAP examined detailed financial records, GST returns, sale agreements, RERA filings, and bank statements, and recomputed the ITC benefit attributable to eligible buyers, including the complainant.

Issue Raised: Whether Arkade Developers had contravened Section 171 of the CGST Act, 2017 by failing to pass on the benefit of additional GST input tax credit to the homebuyer through a commensurate reduction in price.

GST Appellate Tribunal Decided: The GST Appellate Tribunal accepted the DGAP’s reinvestigation report in full and held that there was no contravention of Section 171 of the CGST Act. The Tribunal noted that although a profiteering amount of Rs. 1,37,672 initially arose in respect of the complainant’s unit, Arkade Developers had already passed on Rs. 1,40,732 to the buyer, which exceeded the computed benefit.

The Tribunal further recorded the respondent’s unconditional acceptance of the DGAP report and found that the statutory obligation under the anti-profiteering provisions had been fully discharged. Thus, the proceedings were closed and no further action was warranted.

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