No Anti-Profiteering Found as Project’s Pre-GST Completion Prevented Additional ITC Accrual.

No Anti-Profiteering Found as Project’s Pre-GST Completion Prevented Additional ITC Accrual.

Issue

Whether the respondent (assessee) contravened the anti-profiteering provisions of Section 171 of the CGST Act by allegedly failing to pass on the benefit of additional Input Tax Credit (ITC) to homebuyers in the ‘Ireo Victory Valley’ project following the implementation of GST.

Facts

• An investigation was initiated against the ‘Ireo Victory Valley’ project for the period July 31, 2017, to December 31, 2020, alleging it had failed to pass on the benefit of additional ITC.
• The respondent stated that additional ITC had accrued only in two other group projects, which were executed by separate legal entities.
• The Directorate General of Anti-Profiteering (DGAP) investigated and noted that the project had received its Occupation Certificate (OC) in two parts: July 2016 and September 2017.
• This meant the project was substantially completed either before the GST rollout (July 1, 2017) or very shortly thereafter.
• The DGAP concluded that because of its completion status, the project did not accrue any additional ITC during the investigated period. It therefore reported that no contravention of Section 171 had occurred.
• The National Anti-profiteering Authority (NAA) and its successor, the Competition Commission of India (CCI), ordered repeated re-investigations.
• In every subsequent report, the DGAP analyzed the new queries and maintained its original conclusion that no contravention had occurred.

Decision

• The authority accepted the final DGAP report dated May 23, 2025.
• It held that the repeated investigations had consistently shown that there was no breach of the anti-profiteering mandate.
• The final decision confirmed that the respondent had not contravened the provisions of Section 171(1) in the ‘Ireo Victory Valley’ project.

Key Takeaways

• Completion Status is Critical: The anti-profiteering provision applies only when a project receives a benefit (i.e., additional ITC) after the GST implementation. A project that is substantially completed pre-GST will likely not have any additional ITC to pass on.
• No Benefit, No Contravention: The core principle of Section 171 is that a supplier must pass on an accrued benefit. If the investigation (by DGAP) factually establishes that no benefit has accrued, the allegation of profiteering cannot be sustained.
• Burden of Proof: The investigating authority must factually establish that a quantifiable benefit was received by the supplier. In this case, the DGAP itself concluded that no such benefit existed.
• Factual Findings Hold Weight: Despite multiple orders for re-investigation from higher authorities, the DGAP’s consistent, fact-based conclusion that no additional ITC accrued ultimately formed the basis of the final order.