2026 (1) TMI 1497 - AT - GST

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 ... Passing on the benefit of Input Tax Credit - anti-profiteering - investigation u/s 171 - proceedings under Rule 129 - HELD THAT:- None appeared on behalf of the Respondent or the Applicant. DGAP submitted that the Respondent had duly passed on the benefit of Input Tax Credit to the eligible recipients, which has been duly verified by the DGAP. The investigation report dated 28.11.2024 submitted by the DGAP has been carefully examined along with the Respondent’s compliance submission dated 15.12.2025, the buyer-wise confirmations reflected in Table-E of the DGAP Report. It is observed that although profiteering was initially determined to the extent of Rs. 25,78,971/- (comprising base amount of Rs. 23,02,653/- and GST of Rs. 2,76,318/-) on account of an incremental Input Tax Credit ratio of 2.43%, the Respondent has passed on a total benefit amounting to Rs. 42,03,560/- to all 11 eligible homebuyers. Further, with respect to the amount of Rs. 17,829/- that was required to be passed on to Shri Mukesh B. Kewalramani, it is observed that the Respondent has duly transferred the said amount through NEFT reference no. 1370645417 dated 13.12.2025. Accordingly, it is held that the Respondent has fully discharged its statutory obligation to pass on the benefit of Input Tax Credit to the eligible recipient in accordance with the provisions of Section 171 of the CGST Act, 2017. Thus, the investigation report dated 28.11.2024 submitted by the Director General of Anti-Profiteering is accepted. Accordingly, the proceedings arising from the complaint filed by Shri Abhay Yagnesh Desai against M/s Axis Infratech LLP are hereby concluded, it being conclusively established that the Respondent has fully complied with the mandate of Section 171 of the CGST Act, 2017 in respect of construction services provided in the “24K” project at Vadodara, Gujarat, and that no further action is warranted. 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.