Passing on benefit of Input Tax Credit investigation report accepted; respondent found compliant after passing benefits to homebuyers

Investigation under anti-profiteering concerning passthrough of input tax credit found that the supplier had discharged the statutory obligation to pass on ITC; DGAP verification showed total benefits passed exceeded initially determined profiteering amount, including specific remittance to an eligible buyer, and the DGAP report was accepted, concluding proceedings and requiring no further action.

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Issues: Whether the Respondent has duly passed on the benefit of Input Tax Credit to eligible homebuyers in its "24K" project in accordance with Section 171 of the Central Goods and Services Tax Act, 2017.

Analysis: The DGAP investigation quantified the anti-profiteering benefit for 11 eligible buyers by applying an incremental ITC ratio of 2.43% to the post-GST purchase value and using an area-based allocation, producing a total profiteering computation of Rs. 25,78,971/-. The DGAP report and annexed buyer confirmations show that the Respondent had credited benefits totalling Rs. 42,03,560/- to the 11 buyers, exceeding the computed amount. One shortfall of Rs. 17,829/- in favour of a single buyer was rectified by NEFT transfer and acknowledged by the recipient. The Respondent also accepted the DGAP findings in reply and provided evidence of the specific payment and buyer acknowledgements. On these facts, the prescribed statutory mechanism under Section 171 and Rule 129 has been satisfied by monetary disbursement and documented buyer confirmations.

Conclusion: The Respondent has fully discharged the statutory obligation under Section 171 of the Central Goods and Services Tax Act, 2017 by passing on the benefit of Input Tax Credit to the eligible recipients; the DGAP investigation report dated 28.11.2024 is accepted and the proceedings are concluded in favour of the Respondent.

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