Input tax credit pass-on satisfied where verified passing equals or exceeds computed profiteered amount; interest payable.

Determination addresses anti-profiteering in construction services: the increase in input tax credit benefit was quantified by comparing pre- and post-GST credit ratios and applied to post-GST purchase values to compute profiteered amount; that aggregate was adjusted for amounts already passed on and applicable GST, and the computed figure was accepted. Verified documentary evidence showed passed-on payments equal to or exceeding the computed profiteered amount, so the pass-through obligation under Section 171 is satisfied, no penalty is imposed, and interest must be calculated and paid as directed with compliance reporting required.

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Issues: (i) Whether the respondent indulged in profiteering under Section 171 of the Central Goods and Services Tax Act, 2017 during the period 01.07.2017 to 10.11.2022; (ii) Whether the respondent has complied with the obligation to pass on the benefit of input tax credit to eligible recipients and the consequent liability for penalty and interest.

Issue (i): Whether profiteering occurred in respect of construction services supplied during the investigation period.

Analysis: The comparative ratios of credit availed to purchase value for the pre-GST and post-GST periods were computed and the increase in the ratio was applied to the post-GST purchase value to determine total savings attributable to additional input tax credit. The savings per unit area and the net sold area were used to calculate the aggregate profiteered amount, which was then adjusted for amounts already passed on and for applicable GST.

Conclusion: Profiteering was established and the DGAP's computed profiteered amount is accepted for the purpose of assessment.

Issue (ii): Whether the respondent has discharged the obligation to pass on the benefit and the resulting consequences for penalty and interest.

Analysis: Documentary evidence of amounts passed on to eligible recipients was verified and matched against the computed profiteered amount. The verified passed-on amount exceeded the computed profiteered amount. A direction was made for calculation and payment of interest under the specified rule, and no penalty was imposed where passing of benefit has been effected.

Conclusion: The respondent has complied with the requirement to pass on the benefit of input tax credit; no penalty under Section 171 of the Central Goods and Services Tax Act, 2017 is leviable, and interest is to be calculated and paid as directed.

Final Conclusion: The investigation report is accepted, the proved profiteering amount is discharged by the verified passed-on payments, and residual procedural directions relate only to calculation and compliance for payment of interest and filing of compliance reports.

Ratio Decidendi: Where a verified passing of input tax credit benefit to entitled recipients equals or exceeds the computed profiteered amount, the obligation under Section 171 of the Central Goods and Services Tax Act, 2017 is satisfied and penalty is not warranted, subject to payment of interest as per the applicable rule.

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