GSTAT Upholds Anti-Profiteering Liability

In a significant anti-profiteering ruling under the GST regime, the GST Appellate Tribunal (“GSTAT”) upheld the findings of profiteering against Nandi Infratech Pvt. Ltd. in relation to its real estate project “Amaatra Homes”. 

The matter arose from allegations that the developer failed to pass on the benefit of additional Input Tax Credit (“ITC”) accrued under GST to homebuyers by way of commensurate reduction in prices.

The Tribunal accepted the re-investigation report submitted by the Director General of Anti-Profiteering (“DGAP”) and held that the respondent had contravened Section 171 of the CGST Act, 2017. 

Although the developer had already passed substantial ITC benefits to a large number of homebuyers through credit notes and adjustments, the Tribunal concluded that excess benefit granted to certain buyers could not be adjusted against shortfall in respect of other buyers, since each buyer possessed an independent statutory entitlement to commensurate benefit. The Tribunal consequently directed payment of interest at 18% on the profiteered amount.