Passing on Input Tax Credit: no additional ITC benefit found so anti profiteering action was not warranted and complaint closed.

The note addresses whether a supplier failed to pass on input tax credit in breach of Section 171 CGST; an investigation under Rules 128-129 applying the approved methodology found no additional ITC benefit accrued to the supplier requiring pass through, the complainant consented to the investigative report, and the complaint was dismissed with proceedings closed. The operative principle stated is that where no additional benefit accrues to the supplier post GST, anti profiteering action under Section 171 is not warranted.

---

---

Issues: Whether the respondent contravened Section 171 of the Central Goods and Services Tax Act, 2017 by failing to pass on the benefit of input tax credit to the applicant in respect of the sale of the specified residential unit.

Analysis: The matter was investigated under Rule 129 of the Central Goods and Services Tax Rules, 2017 after reference by the Standing Committee on Anti-profiteering under Rule 128 of the Central Goods and Services Tax Rules, 2017. The Directorate General of Anti-Profiteering concluded, following the approved methodology, that no additional benefit of input tax credit accrued to the respondent post-GST implementation and thus no contravention of Section 171 of the Central Goods and Services Tax Act, 2017 was established. The applicant informed the authority that the GST-related issue with the builder had been settled at the time of possession and gave written consent to the DGAP report. The applicant and respondent did not appear for the final hearing and the DGAP report together with submitted documents was accepted.

Conclusion: The DGAP report dated 09.01.2025 is accepted and it is concluded that the provisions of Section 171 of the Central Goods and Services Tax Act, 2017 are not contravened; the proceedings are closed and the complaint is dismissed in respect of the respondent.

Ratio Decidendi: Where an investigation under Rules 128-129 of the Central Goods and Services Tax Rules, 2017 establishes that no additional benefit of input tax credit has accrued to the supplier in a manner that would require passing on to recipients, Section 171 of the Central Goods and Services Tax Act, 2017 is not contravened and anti-profiteering action is not warranted.

---