Anti-profiteering liability requires reduced tax rate or extra input tax credit; absent both, section 171 cannot apply.

Anti-profiteering under section 171 of the Central Goods and Services Tax Act, 2017 is attracted only where GST implementation results in a reduction in tax rate or an additional benefit of input tax credit. On the material examined, the input tax credit as a percentage of turnover was lower in the post-GST period than in the pre-GST period, and the effective tax rate on construction service did not reduce after GST. The Commission found no additional input tax credit benefit accruing to the respondent, and project-wise accounts and RERA information did not establish profiteering liability. Accordingly, no case of profiteering was made out and section 171 was not invoked.

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Issues: Whether the respondent had gained any additional input tax credit on implementation of GST so as to attract anti-profiteering proceedings under section 171 of the Central Goods and Services Tax Act, 2017.

Analysis: The available figures showed that the input tax credit as a percentage of turnover was lower in the post-GST period than in the pre-GST period. The effective tax rate on construction service also did not reduce after GST and, on the material before the Commission, no additional benefit of input tax credit accrued to the respondent. The Commission also noted that the project-wise treatment of accounts and the information from RERA did not establish any basis to fasten profiteering liability in the project.

Conclusion: No case of profiteering was made out and section 171 of the Central Goods and Services Tax Act, 2017 was not attracted.

Ratio Decidendi: Anti-profiteering liability arises only when there is a reduction in tax rate or an additional benefit of input tax credit, and absent either condition, section 171 cannot be invoked.

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