Pre-GST VAT credit verification and proof of passing on input tax credit benefit required further investigation under anti-profiteering review.

NAPA found the DGAP reports insufficient for a conclusive determination because they did not adequately examine the basis for claiming pre-GST VAT credit, including the applicability of the Haryana VAT regime, composition status, and the legality of VAT collection from buyers. It also held that the claim of having passed on the input tax credit benefit was not properly verified, as no buyer acknowledgements or statements were produced to establish actual receipt of the benefit. The matter was therefore remitted for further investigation on VAT credit eligibility and proof of passing on the benefit.

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Issues: Whether the DGAP reports could be accepted on the existing material and whether further investigation was required on the questions of eligibility of pre-GST VAT credit and actual passing on of the input tax credit benefit.

Analysis: The Authority found that the DGAP reports did not satisfactorily examine the basis on which pre-GST VAT credit was claimed, including the applicability of the Haryana VAT regime, composition status, and the legality of VAT collection from buyers. The Authority also found that the claim that the benefit of input tax credit had been passed on was not adequately verified, because no acknowledgements or statements from buyers were produced to establish actual receipt of the benefit. In these circumstances, the existing reports were held to be insufficient for a conclusive determination.

Conclusion: The DGAP reports were not accepted and the matter was sent back for further investigation on the specified issues, including verification of VAT credit eligibility and proof of actual passing on of the benefit.

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