Profiteering re-investigation under GST finds no apparent savings; investigation closed after complainant withdrawal and DGAP report acceptance

Re-investigation into alleged profiteering found no apparent savings based on comparison of pre- and post-GST credit ratios (difference -0.0138%), leading the Directorate General of Anti-Profiteering to conclude there was no contravention of Section 171; complainants subsequently withdrew their complaints and executed a settlement deed, and the standing body accepted the DGAP report, resulting in closure of the matter. The operative effect is termination of the anti-profiteering inquiry with no liability imposed on the respondent due to absence of discernible benefit transfer to customers.

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Issues: Whether M/s Resizone Buildwell Pvt. Ltd. contravened Section 171 of the Central Goods and Services Tax Act, 2017 by profiteering in respect of construction services.

Analysis: The DGAP completed investigation and reported a negative difference in the ratio of credit availed to purchase value between pre-GST and post-GST periods (difference -0.0138), indicating no apparent savings passed on by the respondent. Both complainants have executed settlement/withdrawal documents relinquishing grievances against the respondent. The DGAP's report, incorporating these factual findings and the quantitative comparison in Table A, was considered and accepted.

Conclusion: The DGAP report is accepted and it is concluded that Section 171 of the Central Goods and Services Tax Act, 2017 has not been contravened by M/s Resizone Buildwell Pvt. Ltd.; the matter is closed.

Ratio Decidendi: Where investigation shows no increase in net benefit to the supplier or no apparent savings quantified (as shown by the input tax credit to purchase value comparison) and complainants withdraw their grievances, Section 171 CGST does not stand contravened and the anti-profiteering investigation may be closed.

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