Anti-profiteering provisions do not apply to a pre-GST completed project absent additional input tax credit for construction services.

A real estate project completed before GST was held outside the anti-profiteering mechanism because the completion certificate dated 31.03.2016 was accepted as valid and the construction activity was treated as pre-GST. No credible material showed any additional input tax credit arising for the construction service after GST commenced; the credits relied on were linked to repair and maintenance activity, not the project in question. As the statutory condition of a post-tax benefit requiring commensurate price reduction was not met, section 171(1) of the CGST Act, 2017 was not attracted and no profiteering was established.

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Issues: Whether the respondent had derived any additional input tax credit benefit liable to be passed on to the buyer, and whether the proceedings under the anti-profiteering provisions were maintainable in respect of a project completed before the GST regime.

Analysis: The project was found to have been completed before the introduction of GST, and the completion certificate dated 31.03.2016 was accepted as valid because it was issued by a registered architect recognised under the applicable state law and verified by the jurisdictional tax office. On that basis, the construction activity was treated as having been completed in the pre-GST period. The record further showed no credible material establishing that any additional input tax credit arose in relation to the construction service after GST commenced, and the credits referred to by the respondent were treated as relating to repair and maintenance activity rather than the impugned construction project. In these circumstances, the precondition for applying the anti-profiteering mechanism, namely a post-tax reduction or an increase in input tax credit requiring commensurate price reduction, was not satisfied.

Conclusion: The respondent was not liable under section 171(1) of the CGST Act, 2017, and no profiteering was established.

Ratio Decidendi: Where a real estate project is completed before the GST regime and no additional input tax credit is shown to have accrued for the construction service under GST, the anti-profiteering provisions do not apply.

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