Developer not required to pass ITC benefits from other projects to buyers under Section 171(1) CGST Act

The CCI determined that a real estate developer executing the SKA Green Arch project under single GST registration was not liable to pass on ITC benefits from other projects to buyers under Section 171(1) of CGST Act, 2017. The Commission found the respondent operated only the SKA Green Arch project (executed in two phases with four towers) under the specific GSTIN, with no other projects being developed. Since profiteering amount of Rs. 4,75,87,468 had already been determined for this project by NAA, and no other projects existed under the same registration, the anti-profiteering provisions were inapplicable. Proceedings under Rule 133(5) of CGST Rules, 2017 were consequently dropped.

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Issues involved:
The issues involved in this case are related to the investigation conducted by the Competition Commission of India (CCI) based on the Report received from the Director General of Anti-Profiteering regarding profiteering in projects executed by the Respondent under a single GST Registration No.

Summary:

Investigation and Direction by NAA:
The National Anti-Profiteering Authority (NAA) directed the Director General of Anti-Profiteering (DGAP) to investigate profiteering in projects other than "SKA Green Arch" and submit a report to determine if the benefit of Input Tax Credit (ITC) was passed on to buyers as per Section 171 (1) of the CGST Act, 2017.

DGAP's Findings and Actions:
The DGAP's investigation revealed that the Respondent had realized an additional amount from home buyers during a specific period. The NAA directed further investigation into other projects executed by the Respondent under the same GST Registration. The Respondent denied undertaking any other project besides "SKA Green Arch," which was verified through UP RERA records and jurisdictional Commissionerate.

Commission's Examination and Decision:
The CCI examined the DGAP's report and confirmed that the Respondent was only executing the "SKA Green Arch" project under a single GSTIN. It was verified that no other projects were being undertaken by the Respondent. Based on these findings, the Commission concluded that the case did not fall under the Anti-Profiteering provisions of Section 171 of the CGST Act, 2017. Consequently, the proceedings initiated against the Respondent were dropped.

Conclusion:
The Commission's decision was based on the clear evidence that the Respondent was solely engaged in the "SKA Green Arch" project and had not undertaken any other projects. The investigation and verification process confirmed the Respondent's claim, leading to the dismissal of the proceedings under Rule 133 (5) of the CGST Rules, 2017.

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