Anti-profiteering under GST in real estate: revised input tax credit benefit assessment confirmed, with interest liability upheld.

Section 171 of the CGST Act was applied to a real estate anti-profiteering reassessment after remand, with the DGAP recalculating the input tax credit-to-purchase value ratio for the relevant pre-GST and post-GST periods and examining project-wise sales to determine the benefit still due to eligible pre-GST home-buyers. The respondent accepted the revised DGAP report, and the Tribunal accepted that assessment of profiteering and the associated liability. The grievance concerning interest on refunded amounts after cancellation of allotment was treated as outside the scope of section 171. The respondent was held liable to pay interest on the profiteered amount at 18% from the date of collection until refund.

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Issues: Whether the respondent contravened section 171 of the Central Goods and Services Tax Act, 2017 by not passing on the benefit of input tax credit to home-buyers, and whether the DGAP report assessing profiteering and interest liability deserved acceptance.

Analysis: The proceedings were re-examined after the anti-profiteering matter was remanded for reassessment in the light of the methodology laid down for the real estate sector. The DGAP recalculated the ratio of input tax credit to purchase value for the relevant pre-GST and post-GST periods, examined the project-wise sales position, and quantified the amount still required to be passed on to eligible pre-GST home-buyers. The respondent ultimately accepted the DGAP report. The Tribunal also noted that the grievance regarding interest on refunded amounts after cancellation of allotment did not fall within the scope of section 171.

Conclusion: The respondent was held to have contravened section 171 of the Central Goods and Services Tax Act, 2017, the DGAP report was accepted, and the respondent was held liable to pay interest on the profiteered amount at 18% from the date of collection till refund.

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