Anti-profiteering - benefit of input tax credit - Section 171(1) of the CGST Act, 2017 - post-GST projects not liable under Section 171 for additional ITC - no pre-GST price history - inability to quantify profiteering - time of supply and commencement of output liabilityBenefit of input tax credit - no pre-GST price history - inability to quantify profiteering - Existence of additional benefit of input tax credit to the Respondent which was not passed on to the Applicants. - HELD THAT: - The Authority found that the project was launched and environmental clearance obtained after implementation of GST (environmental clearance on 21.07.2017; draw of lots/allotment on 08.08.2017) and that agreements and receipts arose only in the post GST period. There was therefore no continuity of any pre GST sale price or turnover and no pre GST input tax credit position in respect of the project that could serve as a comparison point. The Government fixed ceiling of Rs. 4,000 per sq. ft. was held to be an indicative maximum and not the actual pre GST sale price charged by the Respondent; consequently that ceiling could not be treated as a pre GST base price for comparison. Because both turnover and credit were nil in the pre GST period for the project, the ratio of ITC to turnover in a pre GST period could not be derived and the differential benefit (if any) was therefore not quantifiable. On these findings the Authority concluded that no additional ITC benefit to the Respondent was established which required passing on to the Applicants. [Paras 17, 18, 19, 20]No additional benefit of input tax credit to the Respondent was established and therefore there was no obligation to pass on any such benefit to the Applicants.Anti-profiteering - Section 171(1) of the CGST Act, 2017 - post-GST projects not liable under Section 171 for additional ITC - time of supply and commencement of output liability - Whether the Respondent contravened the provisions of Section 171(1) of the CGST Act, 2017. - HELD THAT: - The Authority held that the anti profiteering provisions in Section 171(1) apply where a supplier was supplying the goods or services before the introduction of GST so that an additional benefit of ITC or reduction in tax rate arising on GST implementation must be passed on to recipients. In the present case the supply (allotment and sale of flats) and the obligations to discharge output tax arose only after GST came into force; hence there was no pre GST supply to compare with post GST position. The Applicants failed to produce evidence substantiating that the Respondent retained any ITC benefit or that the Respondent had earned interest on any ITC to the detriment of the Applicants. In view of absence of pre GST comparators and lack of evidence, the Authority concluded that Section 171(1) was not attracted and no profiteering was established. [Paras 18, 19, 20, 21]The Respondent did not contravene Section 171(1) of the CGST Act, 2017; the applications alleging profiteering are dismissed.Final Conclusion: The Authority dismissed the applications: finding that the project and allotments commenced post GST, no pre GST price/ITC baseline existed for comparison, no additional ITC benefit to the Respondent was established and Section 171(1) of the CGST Act, 2017 was not attracted.

Benefit of input tax credit - commensurate reduction in prices - Section 171(1) of the CGST Act, 2017 - investigation under Rule 129 of the CGST Rules, 2017 - methodology for computation of profiteering - interest payable under Rule 127 of the CGST Rules, 2017 - penalty under Section 171(3A) - non-retrospectivityBenefit of input tax credit - commensurate reduction in prices - Section 171(1) of the CGST Act, 2017 - methodology for computation of profiteering - Whether the respondent received the additional benefit of ITC after introduction of GST and failed to pass it on by way of commensurate reduction in prices to the applicant in violation of Section 171(1). - HELD THAT: - The Authority examined invoices, purchase order and bills of entry and found that the base prices quoted in the pre-GST quotation/purchase order remained unchanged when supplies were made post-GST while IGST paid at import became available as ITC to the respondent. The Additional Duty of Customs (CVD), the incidence of which had been embedded in pre-GST prices and which was not available as ITC earlier, was subsumed into IGST post-GST and the full IGST at import was available as ITC. The DGAP computed the quantum of benefit arising from availability of such ITC on the four specified goods and compared pre-GST base prices with post-GST invoiced base prices to quantify the amount not passed on. The Authority accepted DGAP's factual findings and mathematical computation as appropriate and consistent with the mandate of Section 171(1), holding that the benefit of ITC had to be passed on by way of commensurate reduction in prices and that such reduction must be in monetary terms. The Authority rejected the respondent's contentions that (i) cost escalations or market price movements or trade discounts could be set off against the statutory obligation to pass on ITC, and (ii) that the DGAP ought to have used a different 'market price' base; it held that the discounts were commercial devices and did not discharge the obligation to pass on the ITC benefit. The Authority therefore upheld the DGAP's computation of profiteering as the amount of ITC-related benefit retained by the respondent vis-a -vis the applicant. [Paras 47, 49, 50, 54, 55]The Authority found that the respondent had received the additional benefit of ITC and had failed to pass it on to the applicant by way of commensurate reduction in prices; the amount profiteered was accepted as Rs. 12,79,304/- for the period 01.07.2017 to 30.09.2019.Interest payable under Rule 127 of the CGST Rules, 2017 - investigation under Rule 129 of the CGST Rules, 2017 - Whether the applicant is entitled to interest on the profiteered amount and the mechanism for its recovery. - HELD THAT: - Rule 127 prescribes return of the amount not passed on along with interest at 18% from the date of collection of the higher amount until return. The DGAP's role is investigative and does not determine interest; adjudication on interest falls to this Authority. Applying Rule 127, the Authority directed that the profiteered amount (as accepted) shall be refunded to the applicant along with interest at 18% from the date the amount was profiteered until refund, and tasked the jurisdictional Commissioners to monitor compliance under supervision of the DGAP. [Paras 26, 55, 56]The applicant is entitled to interest @18% on the profiteered amount from the date of collection of the higher amount till the date of refund; the respondent is directed to refund the amount with interest and the Commissioners of CGST/SGST, State of Karnataka are directed to monitor compliance.Investigation under Rule 129 of the CGST Rules, 2017 - principles of natural justice - Whether the DGAP's notice and investigation were defective or violative of principles of natural justice. - HELD THAT: - The Authority considered the contention that the DGAP's notice was vague (referring initially to 'false ceiling materials') and that particulars were insufficient. The Authority noted the Screening Committee's description and that, during investigation, the DGAP identified the detailed description of the four specific goods from documents filed by the respondent and issued the detailed notice accordingly. The Authority held that the investigation was conducted under the statutory mandate on recommendation of the Standing Committee and that there was no breach of natural justice or procedural infirmity rendering the proceedings invalid. [Paras 3, 4, 9, 46, 52]The Authority rejected the respondent's plea that the DGAP's notice and investigation were defective or violative of natural justice and held the notice and investigation to be legal and maintainable.Penalty under Section 171(3A) - non-retrospectivity - Whether penalty under Section 171(3A) can be imposed for profiteering that occurred during 01.07.2017 to 30.09.2019. - HELD THAT: - Section 171(3A) (penalty) was inserted w.e.f. 01.01.2020. The Authority observed that no specific penalty provision under Section 171(3A) existed during the investigation period (01.07.2017 to 30.09.2019). Applying the non-retrospectivity principle, the Authority held that the penalty under Section 171(3A) cannot be imposed for contraventions that occurred prior to its coming into force. [Paras 51]Penalty under Section 171(3A) cannot be imposed for the period 01.07.2017 to 30.09.2019; therefore no penalty is levied on the respondent for the profiteering found in that period.Final Conclusion: The Authority accepted the DGAP's findings and methodology and held that the respondent contravened Section 171(1) by not passing on the additional ITC benefit to the applicant; the amount profiteered was accepted as Rs.12,79,304/- for the period 01.07.2017 to 30.09.2019, which the respondent is directed to refund to the applicant along with interest at 18% from the date of collection until refund; the notice and investigation were found to be valid and maintainable; and penalty under Section 171(3A) is not leviable retrospectively for the period in question.

Anti-profiteering under Section 171 of the CGST Act, 2017 - Passing on benefit of input tax credit - Requirement of pre-GST price or input tax credit structure for comparison - Applicability of Section 171 where project launched post-GST - Emails and oral assurances not being legally enforceable evidence for anti-profiteeringAnti-profiteering under Section 171 of the CGST Act, 2017 - Passing on benefit of input tax credit - Requirement of pre-GST price or input tax credit structure for comparison - Applicability of Section 171 where project launched post-GST - Emails and oral assurances not being legally enforceable evidence for anti-profiteering - Whether the respondent contravened the provisions of Section 171 of the CGST Act, 2017 by not passing on the benefit of input tax credit. - HELD THAT: - The Authority accepted the DGAP's finding that the impugned project was launched and bookings commenced only after the introduction of GST and that there was no pre-GST tax rate or ITC structure against which post-GST prices or ITC utilisation could be compared. The respondent continued to charge GST on construction services at the effective rate of 12% with ITC, and therefore there was no demonstrable additional ITC benefit or reduction in tax rate to be passed on. In these facts, the emails and oral representations relied upon by the applicant, absent any legally enforceable document, were not relevant material for anti-profiteering proceedings. On this basis the Authority concurred with the DGAP that Section 171 was not attracted and no profiteering could be computed. [Paras 7, 15, 16, 17, 19]No contravention of Section 171 of the CGST Act, 2017 was found; the allegation of failure to pass on ITC benefit is not sustainable and the application is dismissed as not maintainable.Final Conclusion: The Authority accepted the DGAP's conclusion that, because the project was launched and bookings made post-GST with no pre-GST price/ITC baseline and the respondent continued to pay tax at 12% with ITC, there was no occasion under Section 171 to compute or order passing on of any ITC benefit; the complaint is dismissed.

Benefit of input tax credit - profiteering - Section 171(1) of the CGST Act, 2017 - post-GST launch / absence of pre-GST comparator - RERA registration as indicium of project commencementBenefit of input tax credit - post-GST launch / absence of pre-GST comparator - RERA registration as indicium of project commencement - Whether any additional input tax credit became available to the respondent in respect of Aangan Phase II or Phase III which was not passed on to home buyers. - HELD THAT: - The Authority examined chronology and documentary record showing RERA registration and advertisement of Phase II after introduction of GST, draw of lots and receipt of payments in the post GST period, and that Phase III was not launched or registered during the investigation. DGAP further reported that the service of construction of affordable housing was exempt from service tax in the pre GST era and no CENVAT/ITC was availed in that period. Because the project (Phase II) was commenced and allotments/payments occurred after 01.07.2017, there was no pre GST tax rate or input tax credit structure against which post GST tax/ITC could be compared to establish any additional ITC benefit to be passed on. On these findings the DGAP concluded, and the Authority concurred, that no additional ITC benefit was available in respect of Phase II or Phase III. [Paras 6, 8, 12, 14, 16]No additional input tax credit became available to the respondent for Phase II or Phase III that required passing on to home buyers.Section 171(1) of the CGST Act, 2017 - profiteering - post-GST launch / absence of pre-GST comparator - Whether the respondent violated the provisions of Section 171(1) of the CGST Act, 2017 in respect of Project Aangan Phase II or Phase III. - HELD THAT: - Section 171(1) enquiry requires establishing that a benefit (such as additional ITC) arising from GST reforms has not been passed on to recipients. The Authority found that Phase II was launched and booked only after GST came into force and that Phase III was not launched/registered; further, no pre GST ITC was available or claimed. In the absence of any pre GST comparator or available ITC benefit, the requisite factual foundation for invoking Section 171(1) was absent. Applying these determinative facts, the Authority held that Section 171(1) was not attracted in respect of Phase II or Phase III. [Paras 8, 9, 16, 17]Respondent did not contravene Section 171(1) of the CGST Act, 2017 in respect of Phase II or Phase III; the complaint is dismissed.Final Conclusion: On the documentary chronology and DGAP's findings that Phase II was launched, allotted and booked only after GST came into force, that Phase III was not launched/registered during the investigation, and that no pre GST ITC was available or claimed, the Authority held that no additional ITC benefit existed to be passed on and Section 171(1) of the CGST Act, 2017 was not attracted; the matter is dismissed.

Commensurate reduction in prices - passing on benefit of reduction in rate of tax - denial of Input Tax Credit (ITC) and its impact - computation of profiteered amount using ITC-to-turnover ratio - inclusion of tax component in profiteered amount - authority to determine procedure and methodology under Rule 126 - reinvestigation under Rule 133(4) treated as fresh investigationPassing on benefit of reduction in rate of tax - commensurate reduction in prices - Respondent No. 1 did not pass on the commensurate benefit of reduction in GST rate to his customers. - HELD THAT: - The Authority examined the effect of Notification No. 46/2017 reducing the GST rate on restaurant services from 18% to 5% w.e.f. 15.11.2017 and applied Section 171(1) which mandates that any reduction in rate of tax or benefit of ITC shall be passed on to recipients by way of commensurate reduction in prices. Comparison of pre- and post-rate reduction item-wise prices showed that Respondent No. 1 increased base prices for the majority of SKUs beyond the impact of denial of ITC, so that the cum-tax price paid by consumers was not reduced commensurately. The Authority accepted DGAP's approach of computing requisite benefit by reference to item-wise base prices and the quantified impact of ITC denial (as percentage of turnover) for the pre-rate reduction period and concluded profiteering in respect of the items identified. [Paras 10, 11, 14, 38, 40]Respondent No. 1 failed to pass on the commensurate benefit of tax reduction to customers and has resorted to profiteering.Denial of Input Tax Credit (ITC) and its impact - computation of profiteered amount using ITC-to-turnover ratio - The impact of denial of ITC was computed by taking the ratio of ITC to net taxable turnover for the pre-rate reduction period and applied to determine permissible base-price increase; profiteering was established where post-reduction base prices exceeded that allowance. - HELD THAT: - DGAP computed ITC available to Respondent No. 1 for July-October 2017 and derived an ITC-to-net-taxable-turnover ratio of 8.72%. The Authority accepted this ratio (excluding November 2017) because reversals and invoice deficiencies rendered November data unreliable. Using pre-rate reduction average item-wise base prices adjusted for the 8.72% ITC impact and comparing them with actual post-reduction transaction prices (or month-wise average post-reduction base prices where invoice-level data were unavailable), DGAP identified items where price increases exceeded the ITC impact and quantified the excess. The Authority found this methodology reasonable and in consonance with Section 171 and prior practice of the Authority. [Paras 13, 14, 17, 39, 42]The ITC-to-turnover ratio of 8.72% was correctly adopted for computing the denial-impact and the methodology applied to identify and quantify profiteering on items exceeding that impact is upheld.Inclusion of tax component in profiteered amount - commensurate reduction in prices - The profiteered amount properly includes the GST component collected on the excess base price. - HELD THAT: - Section 171 requires that the benefit of tax reduction be passed on by way of commensurate reduction in price, which encompasses both base price and tax. Where suppliers collected excess base price post-reduction and thereby also collected excess GST from customers, that excess tax formed part of the benefit denied to consumers. The Authority held that such excess GST cannot be recovered from Government and must be included in the profiteered amount to be deposited in Consumer Welfare Funds, and that Respondent No. 1 could have returned excess tax by issuing credit notes under Section 34. [Paras 10, 15, 49]DGAP correctly included the tax component (GST on the excess base price) in computing the profiteered amount.Reinvestigation under Rule 133(4) treated as fresh investigation - authority to determine procedure and methodology under Rule 126 - Reference back to DGAP under Rule 133(4) constituted a fresh investigation and the DGAP's re-investigation and subsequent report were admissible and timely. - HELD THAT: - The Authority recorded reasons for re-investigation under Rule 133(4) to obtain invoice/transaction-wise data and to recompute profiteering in line with Section 171(1)-(2). The Authority's guidelines treat reports under Rule 133(4) as fresh reports for purposes of Rule 133(1); accordingly the re-investigation and the DGAP's report furnished pursuant thereto were to be treated as a fresh investigation, within time, and the cases cited by Respondent No. 1 alleging time-bar were rejected. [Paras 19, 20, 43]The referral under Rule 133(4) amounted to a fresh investigation; the DGAP's re-investigation report is valid and timely.Authority to determine procedure and methodology under Rule 126 - Rule 126 delegation to the Authority to determine procedure and methodology for anti-profiteering enquiries is valid and not an excessive or unlawful sub-delegation. - HELD THAT: - Respondent No. 1's challenge to the vires of Rule 126 and to the absence of a single fixed computational formula was considered. The Authority held Section 171 prescribes the substantive mandate (pass on tax/ITC benefits) and that mathematical computation varies by SKU and facts; Rule 126 empowers the Authority to determine procedure and methodology (not to legislate) and is a permissible delegation. Prior decisions and the Authority's issued methodology were sufficient for investigatory computation; absence of a universal single formula does not render the regime unenforceable. [Paras 51, 57]The Authority's power under Rule 126 to determine methodology is lawful and the absence of a universal mathematical formula does not invalidate anti-profiteering enforcement.Period of investigation - passing on benefit of reduction in rate of tax - The investigation period from 15.11.2017 to 31.03.2019 was correctly adopted and profiteering was computed for that entire period. - HELD THAT: - Respondent No. 1 argued for exclusion of later months (e.g., after price revisions) or for a limited period; the Authority observed that Respondent No. 1 increased base prices immediately w.e.f. 15.11.2017 and failed to pass on benefits up to 31.03.2019, with no evidence of earlier compliance. As the contravention continued, computation for the whole period was appropriate. The Authority therefore retained the full investigation window used by DGAP. [Paras 3, 46, 47]The period 15.11.2017 to 31.03.2019 is properly adopted for computation of profiteering.Penalty under Section 171(3A) - Penalty under Section 171(3A) was not imposed retrospectively for the investigation period. - HELD THAT: - While the Authority found contravention of Section 171(1), Section 171(3A) prescribing penalty became operational only w.e.f. 01.01.2020. Since the profiteering occurred during 15.11.2017-31.03.2019, imposition of penalty under Section 171(3A) for that period would be retrospective and therefore was not issued; no show-cause on penalty was required. [Paras 64, 66]Penalty under Section 171(3A) is not imposed retrospectively for the period of investigation.Computation of profiteered amount using ITC-to-turnover ratio - Amount of profiteering determined as Rs. 78,41,754/- (including GST) and directed to be deposited in Consumer Welfare Funds with interest. - HELD THAT: - Accepting DGAP's computations (Annexure-17) based on pre- and post-rate comparisons, ITC impact and available supplied data, the Authority quantified net higher sale realization due to excess base-price increases as Rs. 78,41,754/-, inclusive of GST on the profiteered base amount. As recipients were not identifiable, Respondent No. 1 was directed to deposit equal halves in the Central and Maharashtra State Consumer Welfare Funds along with interest at 18% from dates of realization until deposit; deposit to be made within three months, failing which recovery to be effected by the concerned Commissioners. [Paras 15, 41, 65]Profiteered amount fixed at Rs. 78,41,754/-, to be deposited in equal shares into the Central and State Consumer Welfare Funds with prescribed interest.Final Conclusion: The Authority found that Respondent No. 1, a franchisee, contravened Section 171(1) by not passing on the commensurate benefit of the GST rate reduction (18% to 5% w.e.f. 15.11.2017) and by increasing base prices beyond the permissible impact of denial of ITC. Applying the accepted ITC-to-turnover ratio and DGAP's computations, the profiteered amount was determined as Rs. 78,41,754/- (inclusive of GST), to be deposited equally into the Central and Maharashtra State Consumer Welfare Funds with interest; the penalty under Section 171(3A) was not imposed retrospectively as it came into force w.e.f. 01.01.2020.

Commensurate reduction in prices - passing on benefit of tax reduction and input tax credit - denial of input tax credit as basis for price increase - DGAP's jurisdiction to conduct detailed investigation under Rule 129 - time limits for investigation and extension under Rule 129(6) - methodology and procedure for determination of profiteering under Rule 126 - deposit in Central and State Consumer Welfare Funds - non-application of penalty retrospectively under Section 171(3A)Commensurate reduction in prices - passing on benefit of tax reduction and input tax credit - Whether the Respondent passed on the commensurate benefit of the reduction in GST rate to its customers - HELD THAT: - The Authority found that the GST rate on restaurant services was reduced from 18% to 5% w.e.f. 15.11.2017 without ITC and that Section 171(1) required the supplier to pass the benefit to recipients by way of commensurate reduction in prices. On comparison of pre- and post-rate-reduction average item-wise base prices (pre-period data taken into account as described in the report), it was established that the Respondent increased base prices of 1,434 out of 1,650 items by more than the percentage required to offset denial of ITC. Consequently the customers did not receive the commensurate reduction in final prices despite the lower tax rate. The Authority accepted the DGAP's approach of comparing item-wise average selling prices in the pre-rate-change period with actual post-rate-change prices and factoring denial of ITC as a percentage of taxable turnover for the pre-rate period for this determination. [Paras 127, 129, 130, 131, 132]The Respondent did not pass on the commensurate benefit of the GST rate reduction to its customers and thereby contravened Section 171(1).Denial of input tax credit as basis for price increase - methodology and procedure for determination of profiteering under Rule 126 - Whether the method of computing denial of ITC and its application in quantifying profiteering was lawful and correctly applied - HELD THAT: - DGAP computed ITC attributable to restaurant service by using the period 01.07.2017 to 31.10.2017 (excluding November 2017 for reasons stated in the report) and determined an ITC-to-turnover ratio. The Authority accepted DGAP's reasoning for that choice of period (incomplete invoice-wise data for early November, reversals and ineligible post-15.11.2017 credits) and noted that DGAP subsequently corrected an omission by including certain ITC amounts availed in 01-14 Nov 2017, revising the ITC ratio to 10.22%. The Authority held that Rule 126 empowers the Authority to determine methodology and that the DGAP's item-wise mathematical comparison (average pre-rate base price plus ITC-impact vs. actual post-rate selling price) was an acceptable application of that methodology for quantification of profiteering. [Paras 21, 26, 32, 132, 133]DGAP's methodology and its corrected computation (ratio of ITC to turnover revised to 10.22%) for quantifying the impact of denial of ITC and computing profiteering was accepted.DGAP's jurisdiction to conduct detailed investigation under Rule 129 - time limits for investigation and extension under Rule 129(6) - Whether DGAP lawfully investigated all items and whether the period of investigation and any extensions were valid - HELD THAT: - The Authority examined Respondent's challenge that DGAP exceeded its mandate by investigating items beyond those mentioned in the complaint and that the Screening Committee/Standing Committee acted beyond prescribed timelines. The Authority held that Rule 129 empowers DGAP to investigate whether benefits have been passed for the relevant service (restaurant service) and there is no provision limiting investigation strictly to those SKUs named in the initial complaint. The Authority also accepted DGAP's explanation regarding the investigation period (15.11.2017 to 30.04.2019) and that the timeline provisions were amended by Notification No.31/2019 so as to extend the period available to DGAP; the Authority granted the requisite extension in terms of Rule 129(6). The Authority further held that the statutory timelines are directory and that the DGAP's investigation covering all supplies of restaurant service was within its remit, given the common ITC pool and the need to examine all SKUs to ascertain passing on of benefits. [Paras 18, 135, 136, 137, 138]DGAP lawfully investigated all restaurant-service supplies; the chosen investigation period and the extension granted were upheld and DGAP did not exceed its jurisdiction.Deposit in Central and State Consumer Welfare Funds - inclusion of tax component within profiteered amount - Quantum of profiteering, treatment of collected tax, and relief to be ordered - HELD THAT: - On the basis of item-wise comparisons and the revised ITC ratio, DGAP calculated the net higher sale realization (profiteered amount) and revised it in the supplementary report. The Authority accepted the revised figure of profiteering (inclusive of GST on the base profiteered amount) after corrections made by DGAP. The Authority also held that the tax component collected on the excess base price is part of the benefit denied to consumers and must be accounted for in the profiteered amount; the supplier could have issued credit notes and adjusted tax liability. As the beneficiaries could not be identified, the Authority directed deposit of the profiteered sum in equal halves into the Central and respective State Consumer Welfare Funds, with interest @18% from the dates amounts were realized until deposit. [Paras 25, 26, 123, 149]Profiteered amount accepted as Rs. 3,10,56,939/- (revised figure); Respondent directed to deposit equal halves into Central and State Consumer Welfare Funds with interest, within three months.Non-application of penalty retrospectively under Section 171(3A) - Whether penalty under Section 171(3A) could be imposed for contraventions committed during 15.11.2017 to 30.04.2019 - HELD THAT: - Section 171(3A) (penalty for contravention) was inserted w.e.f. 01.01.2020. The Authority found that the Respondent's contraventions occurred in the period 15.11.2017 to 30.04.2019 when the penalty provision was not in force. Therefore the penal provision could not be applied retrospectively to that period. [Paras 150]No penalty under Section 171(3A) to be imposed retrospectively; notice for penalty not required.Final Conclusion: The Authority upheld the DGAP's finding that the Respondent failed to pass on the commensurate benefit of the GST rate reduction to customers in respect of restaurant services for the period 15.11.2017 to 30.04.2019; after corrections to ITC computation, the profiteered amount was fixed at Rs. 3,10,56,939/- (inclusive of tax) and the Respondent was directed to deposit equal halves into the Central and State Consumer Welfare Funds with interest @18% within three months. DGAP's jurisdiction, methodology and investigation period were sustained, and penalty under Section 171(3A) was not imposed as that provision was not in force during the violation period.

Passing on of benefit of tax rate reduction by commensurate reduction in prices - anti-profiteering under Section 171 of the CGST Act, 2017 - denial of input tax credit (ITC) and its impact on base price - methodology for computation of profiteering where invoice-level data is unavailable - liability of registered person/franchisee to comply with Section 171 - inclusion of tax component in computation of profiteered amount - period of investigation for computation of profiteered amount - non-retroactivity of penalty newly inserted after the period of alleged violationPassing on of benefit of tax rate reduction by commensurate reduction in prices - anti-profiteering under Section 171 of the CGST Act, 2017 - Respondent failed to pass on the commensurate benefit of reduction in GST rate to consumers and contravened Section 171(1) of the CGST Act, 2017. - HELD THAT: - The Authority found that the GST rate on restaurant services was reduced from 18% to 5% w.e.f. 15.11.2017 and that the respondent increased base prices of a large number of items on the intervening night. Comparison of pre- and post-rate reduction Menu Price Lists showed that for 115 of 137 items the base price increase exceeded the percentage impact of denial of ITC. Given Section 171(1) mandates passing on tax rate reduction/ITC benefit by way of commensurate reduction in prices (i.e., reduction in final price payable by each recipient), the respondent's conduct amounted to denial of benefit to consumers. The Authority therefore held profiteering established for the investigation period. [Paras 14, 17, 28, 32, 33]Profiteering established; respondent contravened Section 171(1) for the period 15.11.2017 to 30.06.2019.Denial of input tax credit (ITC) and its impact on base price - ratio of ITC to taxable turnover - The correct methodology was to determine the impact of denial of ITC by computing the ratio of ITC availed to net taxable turnover for the pre-rate reduction period and apply that percentage to assess commensurate price adjustment. - HELD THAT: - DGAP computed ITC availed (July-Oct 2017) of Rs.4,54,734 against outward taxable turnover of Rs.47,18,983 to arrive at an ITC/turnover ratio of 9.64%. The Authority accepted that ITC 'availed' (not 'utilized') is the appropriate metric because availment reflects inputs/input services attributable to outward supplies and utilization depends on a registrant's choice. The respondent's alternative calculation (9.86%) was rejected due to inclusion of ITC attributable to the whole of November 2017 and inclusion of compensation cess credit which was not lawfully usable for output tax discharge. [Paras 16, 31, 34, 36]ITC-to-turnover ratio of 9.64% for the pre-rate reduction period is correctly used to determine denial-of-ITC impact.Methodology for computation of profiteering where invoice-level data is unavailable - use of Menu Price Lists and quantities sold - Where invoice-wise pre- and post-change data are not furnished or are unusable, computation of profiteering on the basis of comparative Menu Price Lists and available sold quantities is appropriate. - HELD THAT: - Respondent failed to provide invoice-wise outward supply data in usable format (claimed system crash; invoices later submitted as non-editable PDFs and inconsistent product descriptions). The Authority held that deliberate withholding/mis submission of data justified DGAP's use of Menu Price Lists verified on sample invoices and sold quantity data to compute profiteering. Given these circumstances, the alternative average-price comparison method could not be applied. [Paras 6, 10, 18, 30, 31]DGAP's methodology of using Menu Price Lists together with available quantity data for computation of profiteered amount in these circumstances is appropriate and reasonable.Liability of registered person/franchisee to comply with Section 171 - A franchisee who is a separate GST registrant and avails ITC is individually liable to comply with Section 171 and cannot shift that responsibility to the franchisor. - HELD THAT: - The respondent claimed prices were fixed by franchisor. The Authority noted respondent held separate GST registration and availed ITC; no cogent evidence was produced to show lack of control over pricing. Section 171 responsibility rests on the registered supplier who availed the benefit and therefore cannot be displaced. [Paras 22, 37]Respondent (franchisee) is personally responsible for passing on the benefit and cannot shift liability to franchisor.Inclusion of tax component in computation of profiteered amount - price includes base price and tax for purposes of Section 171 - The element of GST collected from consumers on the excess base price is properly included in the profiteered amount. - HELD THAT: - Section 171 requires passing on benefit by way of commensurate reduction in price, which includes both base price and tax. If a supplier charged excess base price post-rate reduction, it also collected excess tax on that excess base price; inclusion of that tax in the profiteered amount is correct because the supplier could have refunded it or adjusted by credit notes notwithstanding subsequent payment to government. [Paras 13, 45]GST on the excess (profiteered) base amount is to be treated as part of the profiteered amount.Period of investigation for computation of profiteered amount - The investigation period from 15.11.2017 to 30.06.2019 is appropriate and profiteering is to be computed for that full period. - HELD THAT: - Respondent had increased base prices w.e.f. 15.11.2017 and did not demonstrate passing on of benefit at any date up to 30.06.2019. The Authority observed that profiteering continued throughout this period and that DGAP's consistent practice to take investigation up to the latest month of receipt of Standing Committee reference (June 2019) is not arbitrary. Exclusion of later months suggested by respondent was rejected. [Paras 4, 21, 44]Profiteering computed for and upheld across 15.11.2017 to 30.06.2019.Computation and deposit of profiteered amount - consumer welfare fund deposit and interest - The profiteered amount is Rs. 6,85,531 (inclusive of GST on the profiteered base) and, as recipients are not identifiable, the respondent is directed to deposit the amount in equal parts in the Central and State Consumer Welfare Funds with interest at 18% from dates of realization. - HELD THAT: - On the basis of DGAP's item-wise computations (Annexure-15) and accepted methodology, the Authority determined the net higher sale realization due to base price increases (including GST on that excess) to be Rs.6,85,531 for the investigation period. Recipients could not be identified; under Rule 133(3)(c) the amount is to be deposited in Consumer Welfare Funds in two equal parts, with interest at 18% computed from dates of realization until deposit, within three months, failing which recovery by Commissioners is directed. [Paras 21, 33, 47, 49]Respondent directed to deposit Rs. 6,85,531 in equal parts to Central and Maharashtra State Consumer Welfare Funds with interest @18% within three months.Non-retroactivity of penalty newly inserted after the period of alleged violation - Penalty under Section 171(3A) cannot be imposed because that penal provision was inserted w.e.f. 01.01.2020 and was not in force during the period 15.11.2017 to 30.06.2019. - HELD THAT: - Although profiteering offence under Section 171(3A) exists, the Authority observed the penal provision was introduced after the period of alleged contravention. Principle of non-retroactivity prevents imposing that penalty for past conduct; consequently no notice for penalty under Section 171(3A) is required. [Paras 48]No penalty under Section 171(3A) is imposed for the investigation period as that provision was not in force then.Final Conclusion: The Authority upheld DGAP's finding of profiteering for the period 15.11.2017 to 30.06.2019, confirmed the computation methodology adopted given the respondent's failure to furnish usable invoice-level data, fixed the profiteered amount at Rs. 6,85,531 (including GST on the excess) and directed deposit of the amount in equal parts to the Central and Maharashtra State Consumer Welfare Funds with interest @18% within three months; penal notice under Section 171(3A) was not issued because that provision was not in force during the relevant period.

Violation of Section 171(1) - failure to pass on benefit of Input Tax Credit - Penalty under Section 171(3A) of the CGST Act - Prospective operation of penal provisions - no retrospective imposition of penaltyViolation of Section 171(1) - failure to pass on benefit of Input Tax Credit - Respondent failed to pass on the benefit of additional Input Tax Credit to buyers and thereby violated the statutory obligation. - HELD THAT: - The Authority reviewed the DGAP's investigation and its earlier determination. The Authority had earlier determined the profiteered amount and held that the respondent did not pass on the benefit of ITC to the complainant and other home buyers for the period specified. On consideration of the respondent's submissions and the materials on record, the Authority affirms that the respondent did not pass on the benefit of ITC and thereby contravened the obligation under Section 171(1) of the CGST Act, 2017. [Paras 2, 6]Respondent is held to have violated Section 171(1) by not passing on the benefit of ITC for the period 01.07.2017 to 31.12.2018.Penalty under Section 171(3A) of the CGST Act - Prospective operation of penal provisions - no retrospective imposition of penalty - Whether penalty under the newly inserted provision can be imposed for violations occurring prior to its effective date. - HELD THAT: - The Authority examined the statutory position and the notification bringing into force the Finance (No.2) Act, 2019 provision that inserted sub-section 171(3A). The notification implemented the amendment with effect from 01.01.2020. Since there was no penal provision in force during the period of violation (01.07.2017 to 31.12.2018), the Authority concluded that the penalty under Section 171(3A) cannot be applied retrospectively. Consequently, the notice issued for imposition of penalty was withdrawn and the penalty proceedings were dropped. [Paras 7, 8]Penalty under Section 171(3A) cannot be imposed for the period 01.07.2017 to 31.12.2018; the penalty notice dated 10.02.2020 is withdrawn and penalty proceedings are dropped.Final Conclusion: The Authority affirmed that the respondent violated Section 171(1) by not passing on the benefit of Input Tax Credit for 01.07.2017 to 31.12.2018, but held that the penal provision introduced by Finance (No.2) Act, 2019 and brought into force on 01.01.2020 cannot be applied retrospectively; the penalty proceedings are accordingly withdrawn.

Violation of Section 171(1) (anti-profiteering) - Failure to pass on benefit of reduction in tax rate - Penalty under Section 122(1)(i) for issuance of incorrect or false invoices - Non-retroactivity of penal provision inserted by Finance Act, 2019 (Section 171(3A))Violation of Section 171(1) (anti-profiteering) - Failure to pass on benefit of reduction in tax rate - The Respondent did not pass on the benefit of reduction in IGST on specified products and thereby violated the provisions of Section 171(1) of the CGST Act, 2017. - HELD THAT: - The DGAP's investigation, as recorded in his report dated 30.08.2018, established that the Respondent charged prices on two products without passing on the benefit of the reduced IGST rate. This Authority, after notice and hearing, had earlier determined the profiteered amount and held the Respondent in violation of Section 171(1). The present order records and confirms that the Respondent failed to pass on the benefit of tax rate reduction to his recipients. [Paras 6]Respondent found to have violated Section 171(1) by not passing on the benefit of tax-rate reduction.Penalty under Section 122(1)(i) for issuance of incorrect or false invoices - Scope of Section 122(1)(i) - The penalty provision in Section 122(1)(i) of the CGST Act, 2017 is not applicable to the failure to pass on benefits under Section 171(1) and therefore cannot be invoked for that violation. - HELD THAT: - Though no specific penalty was prescribed for breach of Section 171(1) at the time of the contravention, the Authority examined whether the general penal provision in Section 122(1)(i), which deals with incorrect or false invoices and related offences, could be applied. On perusal, the Act's language shows that omission to pass on tax-rate benefits under Section 171(1) is not encompassed within the mischief targeted by Section 122(1)(i); consequently, the penalty under Section 122 cannot be imposed for violation of the anti-profiteering provisions. [Paras 7]Penalty under Section 122(1)(i) cannot be imposed for failure to pass on benefits under Section 171(1).Non-retroactivity of penal provision inserted by Finance Act, 2019 (Section 171(3A)) - Temporal application of penal statutes - The penal provision for breach of Section 171(1) inserted as Section 171(3A) by the Finance Act, 2019 (effective 01.01.2020) cannot be applied retrospectively to conduct occurring before its commencement; therefore, the new penalty provision is not attractable to the present case. - HELD THAT: - The Finance Act, 2019 introduced a specific penalty for violation of Section 171(1) by inserting Section 171(3A) with effect from 01.01.2020. The Authority held that, because the Respondent's contravention occurred prior to the coming into force of that provision, the penal sanction cannot be applied retrospectively. In view of the inapplicability of Section 122 and the non-retrospective character of Section 171(3A), the show-cause proceedings initiated under Section 122 were withdrawn and the penalty proceedings dropped. [Paras 8, 9]Penal provision under Section 171(3A) cannot be applied retrospectively; penalty proceedings withdrawn and dropped.Final Conclusion: The Authority confirmed that the Respondent failed to pass on the benefit of IGST rate reduction and thus violated Section 171(1). However, since the general penal provision in Section 122(1)(i) does not cover that violation and the specific penalty provision under Section 171(3A) (inserted by the Finance Act, 2019) is not retrospective, the show-cause notice seeking penalty under Section 122(1)(i) is withdrawn and the penalty proceedings are dropped.

Failure to pass on benefit of input tax credit - profiteering - violation of Section 171(1) of the CGST Act, 2017 - prospective operation of penal amendment - penalty under Section 171(3A) of the CGST Act, 2017 - retrospective imposition of penaltyFailure to pass on benefit of input tax credit - profiteering - violation of Section 171(1) of the CGST Act, 2017 - The Respondent did not pass on the benefit of input tax credit to buyers for the period 01.07.2017 to 31.08.2018 and thereby violated Section 171(1) of the CGST Act, 2017. - HELD THAT: - The DGAP's investigation and report established that the Respondent failed to reduce the prices of flats commensurately on introduction of GST from 01.07.2017 and thus denied the benefit of input tax credit to the buyer of flat No. 704 and other buyers. After consideration of the material and submissions, the Authority accepted the DGAP's determination of profiteering and recorded that the Respondent had not passed on the benefit of ITC for the period in question, constituting a breach of the statutory obligation under Section 171(1). [Paras 6]Respondent found to have violated Section 171(1) for the period 01.07.2017 to 31.08.2018.Prospective operation of penal amendment - penalty under Section 171(3A) of the CGST Act, 2017 - retrospective imposition of penalty - Penalty under the proviso added as Section 171(3A) cannot be imposed for violations that occurred prior to its coming into force on 01.01.2020; consequently the penalty proceedings against the Respondent were withdrawn. - HELD THAT: - The Authority noted that Section 171(3A) was inserted by the Finance (No. 2) Act, 2019 and brought into force by Notification No. 01/2020-Central Tax dated 01.01.2020. As no penal provision existed for contraventions of Section 171(1) during the period 01.07.2017 to 31.08.2018, the Authority held that the penal provision could not be applied retrospectively to impose penalty for earlier conduct. In view of this temporal operation, the notice seeking imposition of penalty under Section 171(3A) was withdrawn and the penalty proceedings were dropped. [Paras 7, 8]Notice for imposition of penalty under Section 171(3A) withdrawn; penalty proceedings dropped as the penal amendment is prospective with effect from 01.01.2020.Final Conclusion: The Authority upheld the finding of profiteering for the period 01.07.2017 to 31.08.2018 but declined to impose penalty because the penal provision (Section 171(3A)) was made effective only from 01.01.2020; the penalty notice was withdrawn and the penalty proceedings against the Respondent were dropped.

Violation of Section 171(1) - failure to pass on benefit of GST rate reduction - profiteering - penalty not leviable under Section 122(1)(i) for non compliance with anti profiteering provisions - non retrospectivity of Section 171(3A) penalty provisionViolation of Section 171(1) - failure to pass on benefit of GST rate reduction - profiteering - Respondent had not passed on the benefit of reduction in the rate of GST to his recipients and was guilty of profiteering in respect of the specified supplies during the period 27.11.2017 to 31.12.2017. - HELD THAT: - The Authority, upon consideration of the DGAP report and the material placed before it, confirmed that the respondent charged incorrect GST rates and did not pass on the benefit of the reduction in GST rate from 12% to 5% on supplies of the specified products. The earlier determination by this Authority fixed the profiteered amount for the period from 27.11.2017 to 31.12.2017, and the present proceedings record that the respondent had collected additional consideration and additional tax from buyers, thereby contravening the obligation under Section 171(1). [Paras 1, 2, 6]Respondent held to have violated Section 171(1) and indulged in profiteering for the period 27.11.2017 to 31.12.2017.Penalty not leviable under Section 122(1)(i) for non compliance with anti profiteering provisions - non retrospectivity of Section 171(3A) penalty provision - Whether penalty could be imposed on the respondent under Section 122(1)(i) for the failure to pass on benefits under Section 171(1), or alternatively under the subsequently inserted Section 171(3A). - HELD THAT: - The Authority examined the statutory scheme and concluded that Section 122(1)(i) does not provide for penalty in respect of failure to pass on benefits under Section 171(1); consequently the penalty under Section 122 could not be invoked for that contravention. The Authority further noted that specific penal provision for breach of Section 171(1) (viz. insertion of Section 171(3A)) was introduced by Section 112 of the Finance Act, 2019 with effect from 01.01.2020. Since no penalty provision existed during the period when the breach occurred (27.11.2017 to 31.12.2017), the later provision cannot be applied retrospectively to impose penalty for that past breach. On this basis the show cause notice seeking to impose penalty under Section 122(1)(i) was withdrawn and the penalty proceedings were dropped. [Paras 7, 8, 9]Penalty under Section 122(1)(i) cannot be imposed for the failure to pass on benefits under Section 171(1); Section 171(3A) (penalty) introduced w.e.f. 01.01.2020 is not retrospective, and therefore penalty proceedings are withdrawn and dropped.Final Conclusion: The Authority reaffirmed that the respondent committed profiteering by failing to pass on the GST rate reduction for the period 27.11.2017 to 31.12.2017, but held that no penalty could be imposed under Section 122(1)(i) for that breach and that the penal provision later inserted as Section 171(3A) (effective 01.01.2020) cannot be applied retrospectively; accordingly the penalty proceedings were withdrawn and dropped.

Anti-profiteering under Section 171(1) - Failure to pass on GST rate reduction - Penalty under Section 122(1)(i) of the CGST Act - Non-retroactivity of penal provisions - Insertion of penalty provision Section 171(3A) by Finance Act, 2019Anti-profiteering under Section 171(1) - Failure to pass on GST rate reduction - Respondent's liability for violation of Section 171(1) for not passing on benefit of GST rate reduction. - HELD THAT: - The Authority examined the DGAP's investigation and earlier determination and concluded that the Respondent did not pass on the benefit of the reduction in GST rate from 28% to 18% in respect of the specified products. On consideration of the material, the Authority found that the Respondent failed to pass the tax-rate reduction benefit to recipients during the relevant period and thereby violated the provisions of Section 171(1) of the CGST Act, 2017. [Paras 6]Respondent held to have violated Section 171(1) for the period specified by the Authority.Penalty under Section 122(1)(i) of the CGST Act - Whether penalty under Section 122(1)(i) can be imposed for failure to pass on the benefit under Section 171(1). - HELD THAT: - The Authority considered the statutory text of Section 122(1)(i) and the nature of the contravention. It found that Section 122(1)(i) provides penalty for specified offences (such as issuing incorrect or false invoices) but does not impose penalty for failure to pass on benefits of tax reduction or input tax credit under Section 171(1). Consequently the statutory scheme does not support imposing penalty under Section 122 for a contravention of the anti profiteering obligation in Section 171(1). [Paras 7]Penalty under Section 122(1)(i) cannot be imposed for violation of Section 171(1).Insertion of penalty provision Section 171(3A) by Finance Act, 2019 - Non-retroactivity of penal provisions - Whether the penalty provision inserted as Section 171(3A) by the Finance Act, 2019 (w.e.f. 01.01.2020) can be applied retrospectively to the respondent's earlier contravention. - HELD THAT: - The Authority noted that specific penalty provisions for violation of Section 171(1) were introduced by Section 112 of the Finance Act, 2019 (inserting Section 171(3A)), which came into force on 01.01.2020. As no penalty provision for breach of Section 171(1) existed during the period when the Respondent committed the contravention (15.11.2017 to 31.07.2018), the Authority held that the later-enacted penal provision cannot be applied retrospectively. Accordingly, the notice issued under Section 122 alleging liability and the penalty proceedings were withdrawn and dropped. [Paras 8, 9]Penalty under newly inserted Section 171(3A) (effective 01.01.2020) cannot be imposed retrospectively; penalty proceedings withdrawn.Final Conclusion: The Authority confirms that the Respondent breached Section 171(1) by not passing on the GST rate reduction for the specified period, but holds that no penalty can be imposed under Section 122(1)(i) for that contravention and that the penalty provision subsequently inserted as Section 171(3A) (effective 01.01.2020) is not retrospectively applicable; accordingly the penalty proceedings are withdrawn and dropped.

Violation of Section 171(1) - failure to pass on benefit of tax reduction - imposition of penalty for anti profiteering contravention - penalty under Section 122(1)(i) not attracted for failure to pass on tax benefit - penalty introduced by insertion of Section 171(3A) by Finance Act, 2019 - non retroactivity of penal provisionsViolation of Section 171(1) - failure to pass on benefit of tax reduction - Respondent's failure to pass on the benefit of GST rate reduction from 28% to 18% on specified products for the period 15.11.2017 to 31.03.2018 and consequent contravention of Section 171(1). - HELD THAT: - The Authority considered the DGAP's investigation report and the Respondent's submissions and found that the Respondent did not pass on the benefit of the reduction in GST rate on the specified products for the period 15.11.2017 to 31.03.2018. On that basis the Respondent was held to have violated the obligation under Section 171(1) of the CGST Act, 2017. This conclusion reiterates the finding recorded by the Authority in its earlier order determining the profiteered amount for the same period. [Paras 6]Respondent breached Section 171(1) by not passing on the tax rate reduction benefit for 15.11.2017 to 31.03.2018.Penalty under Section 122(1)(i) not attracted for failure to pass on tax benefit - Whether the penalty under Section 122(1)(i) of the CGST Act can be imposed for the Respondent's failure to pass on the benefit of tax reduction. - HELD THAT: - The Authority examined the scope of Section 122(1)(i) and the nature of the contravention under Section 171(1). It concluded that Section 122(1)(i) does not prescribe penalty for not passing on benefits of tax reduction or input tax credit; accordingly, the violation of Section 171(1) is not covered by Section 122(1)(i) and penalty under that provision cannot be validly imposed for the anti profiteering contravention identified. [Paras 7]Penalty under Section 122(1)(i) is not attracted for failure to pass on the benefit mandated by Section 171(1).Penalty introduced by insertion of Section 171(3A) by Finance Act, 2019 - non retroactivity of penal provisions - Whether the penalty provision inserted as Section 171(3A) by the Finance Act, 2019 (w.e.f. 01.01.2020) can be applied retrospectively to contraventions occurring during 15.11.2017 to 31.03.2018. - HELD THAT: - The Authority noted that specific penalty provisions for violation of Section 171(1) were introduced by amendment (Section 171(3A)) effected by the Finance Act, 2019, which came into force from 01.01.2020. Since no penalty provision for contraventions of Section 171(1) existed during the period 15.11.2017 to 31.03.2018, the Authority held that the penal provision could not be applied retrospectively to that earlier period. Consequently, the notice seeking imposition of penalty under Section 122(1) was withdrawn and the penalty proceedings were dropped. [Paras 8, 9]Penalty under the provision inserted by Finance Act, 2019 (Section 171(3A)) cannot be imposed retrospectively for contraventions occurring in 15.11.2017 to 31.03.2018; penalty proceedings withdrawn.Final Conclusion: The Authority reaffirmed that the Respondent violated Section 171(1) by not passing on the GST rate reduction benefit for the period 15.11.2017 to 31.03.2018, but held that neither Section 122(1)(i) nor the penalty provision later inserted as Section 171(3A) (effective 01.01.2020) can be applied to impose penalty for that earlier period; the notice for penalty under Section 122(1) is withdrawn and the penalty proceedings are dropped.

Failure to pass on benefit of tax rate reduction - anti-profiteering - Section 171(1) of the CGST Act, 2017 - penalty under Section 122(1)(i) of the CGST Act, 2017 - non-retrospective application of penalty provisions - Section 171(3A) - penalty for violation of Section 171(1)Failure to pass on benefit of tax rate reduction - anti-profiteering - Section 171(1) of the CGST Act, 2017 - Respondent did not pass on the benefit of reduction in the rate of tax to customers in respect of the product "Gamier Nat Shade 3" for the period 15.11.2017 to 31.03.2018 and thereby violated the provisions of Section 171(1). - HELD THAT: - The Authority considered the DGAP's investigation and report and, after hearing the parties, found that no commensurate reduction in the price was passed on to customers for the specified product and period. On that basis the Authority determined the profiteered amount and held that the Respondent had violated the statutory obligation to pass on the benefit arising from the tax rate reduction under Section 171(1). [Paras 6]Violation of Section 171(1) established for the period 15.11.2017 to 31.03.2018 and profiteered amount determined.Penalty under Section 122(1)(i) of the CGST Act, 2017 - non-retrospective application of penalty provisions - Section 171(3A) - penalty for violation of Section 171(1) - Whether penalty could be imposed for the Section 171(1) violation for the period 15.11.2017 to 31.03.2018 under Section 122(1)(i), or retrospectively under the later inserted Section 171(3A). - HELD THAT: - The Authority examined the statutory scheme and observed that no penalty specific to breach of Section 171(1) existed at the time of the violation. Section 122(1)(i) does not cover failure to pass on the benefit under Section 171(1) and thus could not be applied to impose penalty for that breach. Although Section 171(3A) (inserted by Section 112 of the Finance Act, 2019) prescribes a penalty for violation of Section 171(1), that provision came into force from 01.01.2020 and cannot be applied retrospectively to conduct occurring between 15.11.2017 and 31.03.2018. Accordingly the show-cause notice issued under Section 122(1)(i) was withdrawn and the penalty proceedings were dropped. [Paras 7, 8, 9]Penalty proceedings withdrawn and cannot be imposed for the 15.11.2017 to 31.03.2018 period; notice under Section 122(1)(i) withdrawn.Final Conclusion: The Authority upheld that the Respondent failed to pass on the benefit of tax-rate reduction for the product in the period 15.11.2017 to 31.03.2018 and determined the profiteered amount, but directed withdrawal of penalty proceedings because no applicable penalty provision existed at the relevant time and subsequently inserted penalty provisions are not retrospective.

Violation of Section 171(1) (anti profiteering) - Penalty under Section 122(1)(i) for issuance of incorrect or false invoices - Insertion of Section 171(3A) by Finance Act, 2019 and non retrospective operation of penal provisionsViolation of Section 171(1) (anti profiteering) - The Respondent failed to pass on benefit of GST rate reduction to customers for the period 15.11.2017 to 31.07.2018 and thereby violated Section 171(1). - HELD THAT: - The Authority accepted the DGAP's investigation report and, upon consideration of the material and the Respondent's submissions, found that the Respondent did not extend the reduced tax benefit on the supply of the specified product during the stated period. The Authority reaffirmed its earlier determination that the benefit was not passed on and that the statutory mandate in Section 171(1) was violated. [Paras 6]Respondent held to have violated Section 171(1) for the period 15.11.2017 to 31.07.2018.Penalty under Section 122(1)(i) for issuance of incorrect or false invoices - Penalty under Section 122(1)(i) cannot be imposed for mere non passing of rate reduction under Section 171(1) because the former does not prescribe penalty for that specific violation. - HELD THAT: - The Authority examined the scope of Section 122(1)(i) and concluded that it does not cover the failure to pass on benefits mandated by Section 171(1). Although a show cause notice for penalty was issued on the basis that excess consideration and incorrect invoices had been issued, the statutory language of Section 122(1)(i) does not encompass non compliance with Section 171(1), and therefore the penalty under Section 122(1)(i) could not be sustained for that ground. [Paras 7]Notice for imposition of penalty under Section 122(1)(i) withdrawn insofar as it was based on the Section 171(1) violation.Insertion of Section 171(3A) by Finance Act, 2019 and non retrospective operation of penal provisions - The specific penalty provision for violation of Section 171(1) (Section 171(3A)), introduced by Finance Act, 2019 with effect from 01.01.2020, cannot be applied retrospectively to conduct occurring between 15.11.2017 and 31.07.2018. - HELD THAT: - The Authority noted that Section 112 of the Finance Act, 2019 inserted a specific penal provision (Section 171(3A)) effective from 01.01.2020. Because no specific penalty for breach of Section 171(1) existed during the period when the violation occurred, the newly introduced penal provision could not be imposed retrospectively. Consequently, the penalty proceedings initiated earlier were not maintainable and were dropped. [Paras 8, 9]Penalty proceedings under the newly inserted provision cannot be applied retrospectively; the penalty notice dated 28.03.2019 is withdrawn and penalty proceedings dropped.Final Conclusion: The Authority affirmed that the Respondent did not pass on the benefit of the GST rate reduction for the period 15.11.2017 to 31.07.2018 and therefore violated Section 171(1); however, penalty could not be imposed-neither under Section 122(1)(i) nor retrospectively under the Section 171(3A) inserted by the Finance Act, 2019-and the penalty proceedings initiated against the Respondent were withdrawn and dropped.

Failure to pass on benefit of input tax credit - anti-profiteering - obligation under Section 171(1) of the CGST Act to pass on additional ITC - penalty under Section 171(3A) - non-retrospective applicationFailure to pass on benefit of input tax credit - obligation under Section 171(1) of the CGST Act to pass on additional ITC - anti-profiteering - The Respondent denied the benefit of additional input tax credit to buyers of flats in the project 'Green Court' for the period 01.07.2017 to 31.08.2018, thereby violating Section 171(1) of the CGST Act, 2017. - HELD THAT: - The Authority considered the DGAP report dated 28.02.2019 and the materials placed before it, issued notice and heard parties, and in Order No. 57/2019 determined that the Respondent had not passed on the benefit of additional ITC to the applicants and other home buyers in the specified project for the period 01.07.2017 to 31.08.2018. On that basis the Authority held that the Respondent had indulged in profiteering and had violated the statutory obligation under Section 171(1) of the CGST Act, 2017. [Paras 2, 6]The Respondent was held to have violated Section 171(1) by not passing on additional ITC for the period 01.07.2017 to 31.08.2018.Penalty under Section 171(3A) - non-retrospective application - Whether penalty under Section 171(3A) of the CGST Act, 2017 can be imposed on the Respondent for the violation that occurred between 01.07.2017 and 31.08.2018. - HELD THAT: - The Authority noted that sub section 171(3A) was inserted by the Finance (No. 2) Act, 2019 and brought into force from 01.01.2020. As the penalty provision did not exist during the period when the contravention occurred (01.07.2017 to 31.12.2018), the Authority concluded that the penalty under Section 171(3A) could not be imposed retrospectively. Consequently, the notice seeking imposition of penalty under Section 171(3A) was withdrawn and the penalty proceedings were dropped. [Paras 7, 8]Penalty under Section 171(3A) could not be imposed for the period 01.07.2017 to 31.08.2018; the penalty proceedings were withdrawn and dropped.Final Conclusion: The Authority upheld the DGAP's finding that the Respondent failed to pass on the benefit of additional ITC to flat buyers in the 'Green Court' project for 01.07.2017 to 31.08.2018 and thus violated Section 171(1) of the CGST Act, 2017; however, penalty proceedings under Section 171(3A) were withdrawn because the penalty provision was enacted and brought into force after the period of the contravention and therefore cannot be applied retrospectively.

Violation of Section 171(1) - failure to pass on benefit of reduction in rate of tax - Applicability of penal provision under Section 122(1)(i) to anti profiteering - Non retroactivity of penal provision inserted by Finance Act, 2019 (Section 171(3A))Violation of Section 171(1) - failure to pass on benefit of reduction in rate of tax - Respondent did not pass on the benefit of reduction in the rate of tax to customers for the product "Vaseline VTM 400 ml" for the period 15.11.2017 to 31.01.2018. - HELD THAT: - The Authority, upon consideration of the DGAP's report and the parties' submissions, reaffirmed that the respondent failed to effect a commensurate reduction in the price consequent to the tax rate reduction and thereby violated the mandate of Section 171(1) of the CGST Act, 2017. The finding that the base price was enhanced equal to the amount of reduced tax reflects that the benefit was denied to customers. This conclusion reiterates the earlier determination of profiteering and contravention for the specified period. [Paras 6]Violation of Section 171(1) established for the period 15.11.2017 to 31.01.2018.Applicability of penal provision under Section 122(1)(i) to anti profiteering - Penalty under Section 122(1)(i) of the CGST Act, 2017 is not attracted for mere non passing of benefit under Section 171(1). - HELD THAT: - A review of Section 122(1)(i) shows that it penalises issuance of incorrect or false invoices while charging excess consideration and GST, but does not, on its face, prescribe penalty for failure to pass on benefits of a tax rate reduction under Section 171(1). As no specific penalty was provided in the statute for the anti profiteering contravention during the relevant period, the show cause notice invoking Section 122(1)(i) for that breach could not be sustained. [Paras 7]Penalty under Section 122(1)(i) cannot be imposed for the violation of Section 171(1) in the period in question.Non retroactivity of penal provision inserted by Finance Act, 2019 (Section 171(3A)) - The penal provision introduced by Section 112 of the Finance Act, 2019 (inserting Section 171(3A)) coming into force w.e.f. 01.01.2020 cannot be applied retrospectively to penalise conduct occurring between 15.11.2017 and 31.01.2018. - HELD THAT: - The Authority observed that specific penalty provisions for breach of Section 171(1) were inserted only by the Finance Act, 2019 and became effective from 01.01.2020. Since no penalty provision existed at the time the contravention occurred, imposing the later enacted penal provision retrospectively would be impermissible. Consequently, the proceedings initiated for levy of penalty based on the earlier show cause notice were withdrawn and dropped. [Paras 8, 9]The penalty under the subsequently inserted Section 171(3A) cannot be imposed retrospectively; penalty proceedings are withdrawn and dropped.Final Conclusion: The Authority reaffirms that the respondent committed a violation of Section 171(1) for the period 15.11.2017 to 31.01.2018, but holds that no penal provision existed at that time and that neither Section 122(1)(i) nor the penal provision later inserted as Section 171(3A) (effective 01.01.2020) can be invoked retrospectively; accordingly, the notice for penalty is withdrawn and the penalty proceedings are dropped.

Violation of Section 171(1) - failure to pass on benefit of tax rate reduction - Penalty under Section 122(1)(i) for issuing incorrect or false invoices - Non-retrospectivity of penal provision inserted as Section 171(3A) effective 01.01.2020Violation of Section 171(1) - failure to pass on benefit of tax rate reduction - The Respondent did not pass on the benefit of rate reduction to customers for the period 15.11.2017 to 31.01.2018 and thus violated the provisions of Section 171(1) of the CGST Act, 2017. - HELD THAT: - The Authority, having considered the DGAP's investigation report and the material on record, found that the Respondent failed to pass on the benefit of reduced GST rates to the complainant and other customers who purchased items during the specified period. The Authority recorded that such failure constituted a contravention of Section 171(1). The finding restates and affirms the determination made in the Authority's earlier order that the profiteered amount was assessable for the stated period. [Paras 6]Respondent held to have violated Section 171(1) for the period 15.11.2017 to 31.01.2018.Penalty under Section 122(1)(i) for issuing incorrect or false invoices - Penalty under Section 122(1)(i) cannot be imposed for failure to pass on the benefit of rate reduction as contemplated by Section 171(1), because Section 122(1)(i) does not cover that violation. - HELD THAT: - The Authority examined whether the penal provision in Section 122(1)(i), which addresses issuance of incorrect or false invoices while charging excess consideration and GST, could be invoked for the contravention of Section 171(1). On construction, the Authority found that the offence addressed by Section 122(1)(i) does not encompass mere non-passing of rate reduction benefits under Section 171(1). Consequently, the show cause notice issued under Section 122(1)(i) for the same was without basis and withdrawn. [Paras 7]Penalty proceedings under Section 122(1)(i) withdrawn as that provision does not apply to the violation of Section 171(1).Non-retrospectivity of penal provision inserted as Section 171(3A) effective 01.01.2020 - The penal provision inserted as Section 171(3A) by Section 112 of the Finance Act, 2019, which came into force w.e.f. 01.01.2020, cannot be imposed retrospectively for the period 15.11.2017 to 31.01.2018. - HELD THAT: - The Authority noted that specific penalty provisions for violation of Section 171(1) were introduced only by the Finance Act, 2019, through insertion of Section 171(3A) effective from 01.01.2020. As no penalty provision existed for the period when the contravention occurred, the Authority held that the subsequently enacted penal provision could not be applied retrospectively to impose penalty for the earlier period. Accordingly, the penalty proceedings initiated earlier were dropped. [Paras 8, 9]Penalty under the newly inserted Section 171(3A) cannot be imposed retrospectively for violations occurring between 15.11.2017 and 31.01.2018; penalty proceedings dropped.Final Conclusion: The Authority affirmed that the Respondent violated Section 171(1) for the period 15.11.2017 to 31.01.2018 but held that neither Section 122(1)(i) nor the penal provision subsequently inserted as Section 171(3A) (effective 01.01.2020) could be applied to impose penalty for that period; the penalty notice issued under Section 122(1)(i) was withdrawn and the penalty proceedings dropped.

Anti-profiteering - Passing on benefit of Input Tax Credit - Section 171 of the CGST Act, 2017 - Investigation under Rule 129(6) of the CGST Rules, 2017 - Commencement Certificate and RERA registration as indicators of project launch in post-GST regime - Requirement of pre-GST price history for comparison to establish profiteeringPassing on benefit of Input Tax Credit - Commencement Certificate and RERA registration as indicators of project launch in post-GST regime - Requirement of pre-GST price history for comparison to establish profiteering - Whether the respondent contravened the obligation under Section 171 of the CGST Act, 2017 by not passing on the benefit of Input Tax Credit to recipients in respect of the projects investigated. - HELD THAT: - The DGAP's investigation covered the period 01.07.2017 to 31.12.2019 and found that the subject projects were launched after the introduction of GST. Commencement Certificates for the projects were dated 07.09.2018 and 11.05.2018; RERA registration for the Phase II project was obtained on 11.10.2018 with first booking on 02.11.2018, and no EWS unit was sold as of 31.12.2019. Because the projects were launched and booked in the post GST regime, there was no pre GST price history or pre GST ITC/tax rate applicable to those units against which any post GST benefit could be compared. The DGAP thus concluded that the respondent neither obtained an additional ITC benefit in respect of these projects nor enjoyed a post GST rate reduction that could give rise to an obligation under Section 171(1). The Authority examined the report and material, found no error in the DGAP's reasoning, and accepted that anti profiteering provisions do not apply where projects were launched and transacted only in the post GST period and no comparative pre GST benchmark exists.No contravention of Section 171 of the CGST Act, 2017 was made out in respect of the projects investigated; the DGAP's finding is upheld.Final Conclusion: The Authority agreed with the DGAP's report and held that the anti profiteering provisions under Section 171 do not apply to the subject projects launched and transacted in the post GST period; the proceedings initiated by Order No. 78/2019 dated 24.12.2019 are dropped.

Benefit of input tax credit and obligation to pass it on under Section 171 of the CGST Act, 2017 - computation of profiteering by comparing pre GST and post GST input tax credit ratios - commensurate reduction in prices as the sole statutory mode of passing benefit under Section 171 - no retrospective imposition of penalty where penal provision was inserted after the period of contravention - suo moto cognizance and remand for investigation of related projectBenefit of input tax credit and obligation to pass it on under Section 171 of the CGST Act, 2017 - computation of profiteering by comparing pre GST and post GST input tax credit ratios - commensurate reduction in prices as the sole statutory mode of passing benefit under Section 171 - Additional input tax credit became available to the respondent post GST and was not passed on to recipients; profiteering quantified for the period 01.07.2017 to 30.06.2019. - HELD THAT: - The Authority accepted the DGAP's quantification that the ratio of input tax credit to turnover rose from 2.66% (pre GST) to 8.57% (post GST), resulting in an additional ITC benefit of 5.91% of turnover. Applying that percentage to the amounts collected during the period under investigation and recalibrating base prices, the Authority found that the respondent failed to give a commensurate reduction in prices as mandated by Section 171(1) of the CGST Act, 2017. The respondent's contentions - that incremental tax on services (rate rise from 15% to 18%) or only ITC on goods should be excluded, or that increased marketing/commission costs should be offset - were rejected: the Authority held the correct comparator is the total ITC available pre and post GST and that Section 171 prescribes reduction in prices as the mode of passing on benefit, not other adjustments. Consequently, the DGAP's computation of profiteering was upheld. [Paras 15, 16, 31, 33, 34]Profiteering established; total profiteered amount determined as Rs. 2,44,80,835 (inclusive of GST) for the period 01.07.2017 to 30.06.2019, and the respondent directed to pass on the amount to identified buyers with interest and to reduce future prices commensurately.No retrospective imposition of penalty where penal provision was inserted after the period of contravention - Whether penalty under Section 171(3A) could be imposed for profiteering committed during 01.07.2017 to 30.06.2019. - HELD THAT: - Although the respondent's conduct amounted to profiteering under Section 171, the penalty provision under Section 171(3A) was inserted into the CGST Act with effect from 01.01.2020 and was not in force during the period when the contravention occurred. The Authority therefore held that penalty under that provision could not be imposed retrospectively for the period covered by the investigation. [Paras 35]No notice for imposition of penalty to be issued in respect of the period 01.07.2017 to 30.06.2019.Suo moto cognizance and remand for investigation of related project - Whether the DGAP should investigate the respondent's other project ('Epic') for possible non passing of ITC benefit. - HELD THAT: - The respondent admitted that turnover figures for the subject project included amounts from another project ('Epic'). In view of these admissions and discrepancies, the Authority concluded there were sufficient reasons to investigate whether the respondent had failed to pass on additional ITC in respect of the 'Epic' project. The Authority accordingly directed the DGAP to investigate that project and submit a report under the relevant rule. [Paras 36]DGAP directed to investigate the 'Epic' project and report whether benefit of ITC has been passed on to eligible buyers.Final Conclusion: The Authority upheld the DGAP's finding of profiteering for the period 01.07.2017 to 30.06.2019, quantified the profiteered amount at Rs. 2,44,80,835 (inclusive of GST) and directed the respondent to pass this amount to identified buyers with interest and to reduce future prices; penalty under the subsequently inserted provision was not imposed; DGAP directed to investigate the respondent's other project ('Epic').