Tribunal Closes Anti-Profiteering Proceedings After Verifying Full Passing of Rs. 2.02 Crore ITC Benefit

A complaint was filed by Shri Gaurav Pant against M/s Paarth Infrabuild Pvt. Ltd. (the Respondent) alleging that the developer failed to pass on the benefit of Input Tax Credit (ITC) for the project “Paarth Aadyant Lucknow Phase-1”.

The Director General of Anti-Profiteering (DGAP) investigated the project for the period from July 1, 2017, to November 10, 2022. The investigation revealed that the ratio of ITC to purchase value increased from 11.69% in the pre-GST period to 17.13% in the post-GST period, resulting in a computed profiteered amount of Rs. 1,70,87,844.

Main Issue: Whether the Respondent effectively passed on the benefit of the additional Input Tax Credit to the homebuyers as required under Section 171 of the CGST Act, 2017, and if any penalty or interest is further due.

GST’s Decision: The GST Appellate Tribunal (GSTAT) accepted the DGAP’s report but found that the Respondent had already exceeded the required compliance. While the profiteered amount was calculated at Rs. 1,70,87,844, the Respondent demonstrated through verified vouchers and submissions that they had passed on benefits totaling Rs. 2,02,53,991 to eligible homebuyers. As the benefit passed on was higher than the computed amount, the Tribunal held the Respondent had complied with Section 171.

Thus, no penalty was imposed. The Respondent committed to calculating and paying the applicable quantum within two months, and the Tribunal directed a compliance report to be submitted to the Jurisdictional Commissioners.

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