GSTAT Clears Raja Housing of Anti-Profiteering Charges; DGAP Appeal Fails

The proceedings arose from a complaint filed by a flat purchaser against M/s Raja Housing Limited, alleging that GST charged on an apartment purchase was not properly reflected in the receipts. The complaint was examined by the Karnataka State Screening Committee on Anti-Profiteering, based on investigation reports of the State enforcement team and GST authorities. Raja Housing’s project, Raja Ritz Avenue Phase-I, had commenced prior to 01.04.2019, and the developer opted to continue under the old GST regime at 12% with input tax credit.

The developer collected GST from buyers only at 5% and absorbed the balance 7% tax burden itself. The investigation verified sale deeds, payment vouchers, ledgers, audit reports, and GST returns for multiple years and found no short payment or evasion of tax. Despite a separate DRC-01 being issued on invoice-format issues, overall tax payment exceeded ₹17 crore for the project.

Issue Raised: Whether M/s Raja Housing Limited had indulged in profiteering or tax evasion by charging GST at 5% from buyers while discharging GST liability at 12% under the old tax regime

Tribunal Held: The GST Appellate Tribunal upheld the findings of the Karnataka State Screening Committee and concluded that no profiteering was established. It noted that the developer had borne the differential GST burden, maintained proper financial records, and discharged tax liabilities correctly.

No illegality or irregularity was found in the screening committee’s minutes or investigation reports. Therefore, the allegation of profiteering against Raja Housing Limited was dropped and the proceedings were closed.

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