Anti-profiteering duty requires passing on actual ITC benefit through commensurate price cuts, with revised profiteering computation upheld.

NAPA held that the supplier must pass on the actual benefit of additional input tax credit to flat buyers through a commensurate price reduction, and that selective discounts or customer-specific rebates do not satisfy section 171. On the return data and reconciliations, the revised comparison showed a higher ITC ratio in the GST period, so the respondent was found to have contravened the anti-profiteering requirement. The Authority upheld the revised profiteering computation, rejecting objections on VAT credit, project bifurcation, and sold-area figures, and accepted the revised amount determined for buyers. It also directed penalty proceedings, compliance monitoring, and a separate inquiry into the commercial project.

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Issues: (i) whether the respondent had failed to pass on the benefit of additional input tax credit to the flat buyers in terms of the anti-profiteering provisions; (ii) whether the benefit was correctly quantified after excluding unsupported objections relating to VAT credit, project bifurcation, and sold area; (iii) whether penalty and further investigation were warranted.

Issue (i): whether the respondent had failed to pass on the benefit of additional input tax credit to the flat buyers in terms of the anti-profiteering provisions.

Analysis: The Authority examined the pre-GST and post-GST credit-to-turnover ratios on the basis of the figures emerging from the respondent's returns and reconciliations. It accepted the revised comparison showing a higher ITC ratio in the GST period, and rejected the plea that discounts or selective rebates amounted to passing on the statutory benefit. The Authority held that section 171 requires transmission of the actual benefit of additional ITC by commensurate reduction in price, and not ad hoc or customer-specific rebates.

Conclusion: The respondent was found to have contravened the anti-profiteering requirement and had not passed on the benefit of additional ITC to the buyers.

Issue (ii): whether the benefit was correctly quantified after excluding unsupported objections relating to VAT credit, project bifurcation, and sold area.

Analysis: The Authority upheld the DGAP's revised computation, holding that VAT credit on the pre-GST deemed turnover was not to be included for this exercise, that the investigation was properly confined to the residential project, and that the revised sold-area figures supplied by the respondent itself could be used. On that basis, the revised profiteering amount was accepted and the amount attributable to the applicant and other buyers was determined accordingly.

Conclusion: The revised profiteering computation was sustained, and the profiteered amount was fixed at the revised figure determined in the report.

Issue (iii): whether penalty and further investigation were warranted.

Analysis: Having found a contravention of section 171, the Authority held that penalty proceedings were attracted under the anti-profiteering regime. It also directed monitoring of compliance and ordered a fresh investigation into the separate commercial project because the material on record indicated possible anti-profiteering there as well.

Conclusion: Penalty proceedings were directed, compliance monitoring was ordered, and further investigation into the commercial project was initiated.

Final Conclusion: The respondent was held liable for anti-profiteering, was directed to pass on the quantified benefit with interest to the eligible buyers, and the matter was also carried forward for penalty consideration and separate inquiry into the commercial project.

Ratio Decidendi: Under section 171 of the Central Goods and Services Tax Act, the supplier must pass on the actual benefit of additional input tax credit by reducing prices commensurately; selective rebates or unsupported adjustments do not satisfy the statutory obligation, and the quantification may be based on reliable return data and buyer-wise records furnished in the proceedings.

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