Occupancy certificate issuance fixes anti-profiteering computation, requiring identifiable homebuyers to receive input tax credit benefits with interest.

For real-estate anti-profiteering, project completion is determined by actual issuance of the occupancy certificate, not the application date, and computation of post-GST input tax credit benefit ends on that date because post-certificate sales are outside taxable supply. The revised credit-ratio methodology for a project continuing after GST was treated as sustainable, requiring the additional credit benefit to be passed to purchasers. Where transaction and contact records identify homebuyers, the profiteered amount must be refunded to them individually with 18% annual interest; deposit to the consumer welfare fund is confined to genuinely unidentifiable recipients. Penalty under Section 171(3A) cannot apply retrospectively to a period before its effective date.

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Issues: (i) Whether project completion for anti-profiteering purposes is reckoned from the application for, or actual issuance of, the occupancy certificate; (ii) Whether the investigation period was correctly confined to 01.07.2017 to the date of occupancy certificate; (iii) Whether the revised methodology and quantification of profiteering were legally sustainable; (iv) Whether homebuyers were identifiable recipients requiring restitution under Rule 133(3)(b), rather than deposit under Rule 133(3)(c); and (v) Whether penalty under Section 171(3A) was leviable.

Issue (i): Whether project completion for anti-profiteering purposes is reckoned from the application for, or actual issuance of, the occupancy certificate.

Analysis: A project is completed only upon actual grant of the occupancy certificate by the competent authority. Mere filing of an application does not establish completion. The occupancy certificate was issued during the GST period and input tax credit was availed until that date, establishing that the project continued post-GST.

Conclusion: Project completion is reckoned from actual issuance of the occupancy certificate, not from the application date. The finding is against the assessee.

Issue (ii): Whether the investigation period was correctly confined to 01.07.2017 to the date of occupancy certificate.

Analysis: Construction services supplied before issuance of the occupancy certificate remain taxable, whereas post-certificate sale of building is outside taxable supply and constitutes exempt supply for input tax credit purposes. As no admissible input tax credit benefit survives for post-certificate sales, anti-profiteering computation must end on issuance of the occupancy certificate.

Conclusion: The investigation was correctly restricted to 01.07.2017 to 13.10.2017. The finding is against the assessee.

Issue (iii): Whether the revised methodology and quantification of profiteering were legally sustainable.

Analysis: The project fell within the category where construction commenced before GST but continued after GST, and purchasers who paid before GST remained entitled to the benefit of post-GST input tax credit. The revised computation used Chartered Accountant-certified purchase and credit data, compared pre-GST and post-GST credit ratios, calculated per-square-foot savings, and confined the calculation to the period before occupancy certification. It quantified the base benefit at Rs. 2,38,495 and GST thereon at Rs. 28,619.

Conclusion: The revised methodology and total profiteering quantification of Rs. 2,67,114 were sustainable. The finding is against the assessee.

Issue (iv): Whether homebuyers were identifiable recipients requiring restitution under Rule 133(3)(b), rather than deposit under Rule 133(3)(c).

Analysis: Rule 133(3)(c) is a narrow residuary mechanism applicable only where recipients are genuinely incapable of identification. Non-participation in proceedings, present untraceability, or resale of flats does not make recipients unidentifiable where the supplier's transaction, allotment, payment, and contact records disclose their identities. The general statutory remedy is restitution to identifiable recipients with interest.

Conclusion: The homebuyers were identifiable, and the profiteered amount must be refunded to them individually with interest at 18% per annum. The finding is against the assessee.

Issue (v): Whether penalty under Section 171(3A) was leviable.

Analysis: The investigation period preceded the effective date of Section 171(3A). Penal provisions cannot operate retrospectively absent express legislative mandate.

Conclusion: No penalty under Section 171(3A) is leviable for the relevant period. The finding is in favour of the assessee.

Final Conclusion: The additional post-GST input tax credit benefit was required to be passed on to the identifiable homebuyers through commensurate price reduction and restitution with statutory interest, while the subsequently introduced penalty provision could not govern the pre-2020 period.

Ratio Decidendi: In a real-estate anti-profiteering matter, the benefit of post-GST input tax credit must be computed only until actual issuance of the occupancy certificate and passed to identifiable purchasers; the residuary consumer welfare fund mechanism applies only where identification is genuinely impossible, and a later penal provision cannot be retrospectively applied.

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