No Anti-Profiteering In Pure Post-GST Projects: A Legal Analysis

This ruling (delivered in March 2026) clarifies the jurisdictional boundaries of Section 171 of the CGST Act. The Delhi High Court/Authority affirmed that the anti-profiteering mechanism is not a general price-control tool but a specific measure to ensure transition-period benefits reach the consumer.

The Legal Issue

Can a homebuyer claim “anti-profiteering” benefits in a real estate project that was conceived, registered, and constructed entirely after the implementation of the GST regime (July 1, 2017)?

Facts of the Case

The Complaint: Two homebuyers alleged that a developer failed to pass on the benefit of Input Tax Credit (ITC) by reducing the prices of flats in a housing project.
The Investigation: The Director General of Anti-Profiteering (DGAP) investigated the project’s cost structure and tax credits.
The Timeline: The project received its RERA registration on February 8, 2019. All marketing, bookings, allotments, and construction activities took place well after the GST rollout.
DGAP Finding: The DGAP reported NIL profiteering, noting that there was no “additional” benefit of ITC compared to the pre-GST era because there was no pre-GST era for this specific project.

The Decision

The Authority ruled in favour of the developer, closing the proceedings based on these pillars:

Absence of “Benefit” Trigger: Section 171 applies only when there is a reduction in the tax rate or an increase in the ITC benefit. For a project starting post-GST, the tax rate and ITC availability are known factors from day one and are factored into the initial pricing.
Comparison Requirement: Anti-profiteering requires a “before and after” comparison (Pre-GST vs. Post-GST). Since this project spanned only the post-GST period, there was no “pre-GST” baseline to compare against.
Commencement Date is Key: As the project was registered with RERA in 2019, all agreements were entered into under the GST laws. The buyers were aware of the tax implications at the time of booking.
Outcome: The DGAP’s report was accepted, no contravention was found, and the developer was cleared of all charges.

Key Takeaways for Homebuyers and Developers

The “Transition” Rule: Profiteering claims are generally only sustainable for “ongoing” projects—those that started under the Service Tax/VAT regime and were completed under GST.
Pricing Discretion: In post-GST projects, developers are free to set prices based on market forces, as long as the tax collected is correctly remitted. The “benefit of ITC” is already embedded in the price offered to the post-GST buyer.
RERA as Evidence: The RERA registration date serves as conclusive evidence of the project’s timeline. If the RERA date is after July 1, 2017, the developer has a strong defense against profiteering allegations.

Comparison: Ongoing vs. New Projects

Ongoing Projects (Pre-GST Start): Must calculate the ratio of ITC to Turnover in both regimes. Any “extra” credit in the GST era must be passed to the buyer as a price reduction.
New Projects (Post-GST Start): No such calculation is required under Section 171, as the base price is established under a single tax regime.

GOODS AND SERVICE TAX APPELLATE AUTHORITY , NEW DELHI

DGAP

Bengal Peerless Housing Development Company Ltd. (Project AVIDIPTA-II)

A. Venu Prasad, Technical Member

NAPA/101A/PB/2025

JANUARY 14, 2026

ORDER

1. The matter was taken up for hearing in physical mode today.

2. The present proceedings arise out of an application filed under Rule 128 of the Central Goods and Services Tax Rules, 2017 by Shri Sourav Majee, resident of Flat No. 2D, 6E/1, Bhaishnabghata Byelane, Naktala, Kolkata – 700047 (hereinafter referred to as Applicant No. 1), and Smt. Susama Giri, resident of Uttarchak, P.O. Sukrullapur, District Purba Medinipur, Pin – 721626 (hereinafter referred to as Applicant No. 2), alleging contravention of the provisions of Section 171 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the Act) by M/s Bengal Peerless Housing, having its registered office at 6/1A, Moira Street, Mangal Deep, Ground Floor, Kolkata – 700017 (hereinafter referred to as the Respondent), in respect of the project “AVIDIPTA-II”.

3. The Applicants alleged that the Respondent failed to pass on the benefit of Input Tax Credit (ITC) accrued consequent upon the implementation of GST w.e.f. 01.07.2017 by way of commensurate reduction in price in respect of Flat No. G-502 and Flat No. S-601 purchased by Applicant No. 1 and Applicant No. 2 respectively.

4. The Standing Committee on Anti-Profiteering examined the application and referred the matter to the Directorate General of Anti-Profiteering (DGAP) for investigation under Rule 129 of the CGST Rules, 2017. The DGAP submitted its report dated 25.06.2025 concluding that no additional benefit of ITC had accrued to the Respondent post implementation of GST.

5. Notices dated 03.11.2025 were issued to the Applicants inviting objections to the DGAP report. No objections were received.

6. The matter was fixed for hearing on 06.01.2026 and on 14.01.2026. None appeared for the Applicants or the Respondent. Ms. Geetika Chib, Additional Assistant Director (Departmental Representative), assisted by Shri Ravi Passi, Inspector, appeared on behalf of the Director General of Anti-Profiteering (DGAP).

7. The DGAP reiterated the findings of NIL profiteering. It was observed that the project AVIDIPTA-II commenced entirely in the post-GST regime. All activities including advertisement, booking, allotment, agreements and construction occurred after 01.07.2017. As per the RERA Registration Certificate bearing No. HIRA/p/KOL/2019/000366, the project was registered on 08.02.2019, i.e., in the post-GST period.

8. Section 171 of the CGST Act applies only where there is a reduction in tax rate or increase in ITC benefit in projects spanning pre and post GST. Since the impugned project commenced post-GST, Section 171 is not applicable. Reliance is placed on paragraph 128(d) of the Hon’ble Delhi High Court judgment dated 29.01.2024, holding that no ITC benefit is required to be passed on where construction and sale occur post-GST.

9. In view of above, the DGAP report dated 25.06.2025 is accepted. It is held that Section 171 of the CGST Act, 2017 has not been contravened. The proceedings are closed.