Ratio of ITC to Turnover in post- GST period was lower than pre-GST period: NAA holds Builder Supertech Limited not Guilty of Profiteering

The National Anti-Profiteering Authority (NAA) held that Supertech limited not guilty of profiteering ratio of Input Tax Credit to turnover in a post- GST period was lower than the pre-GST period

The brief facts of the present case are that the Applicant No. 1 had filed an application before the Standing Committee on Anti-Profiteering under Rule 128 of the Central Goods & Services Tax (CGST) Rules, 2017.

The Applicant No. 1 had stated in his application that the Respondent had resorted to profiteering in respect of the supply of construction services related to the purchase of Flat J-66C, in the Respondent’s project “Officer Enclave”.

The Applicant No. 1 had also alleged that the Respondent Supertech limited had not passed on the benefit of Input Tax Credit (ITC) by way of commensurate reduction in the price of the apartment purchased by him, on implementation of GST

The said application was examined by Standing Committee on Anti-Profiteering and forwarded with its recommendation to the DGAP for detailed investigation under Rule 129(1) of the CGST Rules, 2017 to investigate whether the benefit of reduction in the rate of tax or ITC had been passed on by the Respondent to his recipients.

Thereafter, the DGAP had issued a notice to the Respondent calling upon the Respondent to reply as to whether he admitted that the benefit of ITC had not been passed on to the Applicant No. 1 by way of commensurate reduction in price with respect to the project mentioned in his Application

The Coram comprising of Chairman, B.N Sharma and two Technical Members, J C Chauhan and Amand Shah pronounced the order based on an application filed against M/s Super tech Limited.

“Explanation:- For the purpose of this section 171, the expression “profiteered” shall mean the amount determined on account of not passing the benefit of reduction in rate of tax on supply of goods or services or both or the benefit of input tax credit to the recipient by way of commensurate reduction in the price of the goods or services of both.”

The authority has observed that the provisions of Section 171 of the Act had been contravened and also said that in the present case, as evident from the DGAP Report, the Respondent has not contravened the provisions of Section 171 of the Act.