2026 (1) TMI 1056 - AT - GST

Profiteering in construction services resolved as DGAP report accepted and ITC benefit transfer for flat buyers finalised and closed

The note addresses alleged profiteering in construction services concerning whether the benefit of input tax credit was passed to flat purchasers; the ... Profiteering - Construction Services - benefit of ITC passed on by the Respondent to its buyers or not - HELD THAT:- The dispute relating to passing of the ITC benefit to flat buyers has been arrived at by the parties. In that view of the matter, the report of the DGAP is accepted and matter is closed. Issues: Whether the DGAP report finding profiteering by the Respondent and the question of passing on of ITC benefit to flat buyers (under Rule 128 of the Central Goods and Services Tax Rules, 2017) should be accepted and the matter closed.Analysis: The Tribunal considered the DGAP investigation report which quantified profiteering and concluded there was an entitlement to GST/ITC related benefit. The Applicant (flat buyers association) informed the Tribunal that the dispute regarding passing on of ITC benefit had been settled with the Respondent through a Memorandum of Understanding dated 05.10.2019 and provided documentary evidence (MOU) showing appropriate benefits/price reductions were allowed to the allottees. The Tribunal examined the DGAP report and the settlement documents and found that the issue of passing of ITC benefit had been resolved between the parties.Conclusion: The DGAP report is accepted and, in view of the settlement reflected in the MOU, the matter is closed; decision is against the Respondent and in favour of the Revenue.