Anti-profiteering complaint rejected where input tax credit ratio declined after GST: GSTAT ruling in DG Anti Profiteering Vs Prateek Infraprojects India Pvt. Ltd.

Background of the dispute

The Goods and Services Tax Appellate Tribunal (GSTAT) recently dealt with a series of anti-profiteering proceedings in DG Anti Profiteering Vs Prateek Infraprojects India Pvt. Ltd.. The case stemmed from allegations that the assessee, engaged in construction of residential units in the project “Prateek Edifice” at Sector-107, Noida, had failed to extend the benefit of input tax credit (ITC) under GST to homebuyers, in violation of Section 171 of the Central Goods and Services Tax Act, 2017.

The proceedings originated upon a reference made by the Standing Committee on 24.01.2020, following applications filed by two homebuyers alleging profiteering in respect of construction services provided by M/s Prateek Infraprojects India Pvt. Ltd., G-50, Lower Ground Floor, Lajpat Nagar – III, New Delhi-110024.

Two applicants, Rajeev Goyal (Applicant No. 1) and Ankush Goel (Applicant No. 2), had approached the authorities asserting that although GST had introduced a broader ITC framework for real estate developers, the incremental benefit of ITC was not being passed on to them through commensurate reduction in prices, as required under Section 171.

Procedural journey and multiple reinvestigations

Initial investigation and first report

  1. The Director General of Anti-Profiteering (DGAP) initially examined the matter and submitted a detailed report to the erstwhile National Anti-Profiteering Authority (NAA) on 27.11.2020.
  2. On 27.07.2022, through I.O. No. 08/2022, the erstwhile NAA was not satisfied with the initial findings and remanded the case back to the DGAP for further examination.
  3. In response, the DGAP furnished a reinvestigation report on 14.02.2023.

Second remand and High Court-linked reinvestigation

  1. The case again did not attain finality. Vide I.O. No. 14/2023 dated 02.01.2024, the erstwhile Authority once more remanded the matter to the DGAP for a further, more detailed reinvestigation.
  2. Subsequently, after the Competition Commission of India (CCI) assumed the role of the then NAA, another remand followed. By letter F.No. M/AP/28/Meeting/2023-24 Sectt./263-305 dated 20.03.2024, the CCI remitted the matter back to the DGAP, this time in compliance with directions issued by the Hon’ble High Court of Delhi vide order dated 29.01.2024.

Fresh reinvestigation and report to GSTAT

  1. Acting pursuant to the Hon’ble Delhi High Court’s order dated 29.01.2024, the DGAP carried out a comprehensive reinvestigation, confined to the period 01.07.2017 to 29.10.2018, i.e., the relevant post-GST window for the project.
  2. The findings of this reinvestigation were crystallized in a report dated 04.06.2025, which was submitted to the Principal Bench, GSTAT on 20.06.2025.

This final DGAP report became the central basis for the Tribunal’s adjudication.

Core issue: Was there any “additional” ITC benefit post-GST?

Under Section 171 of the CGST Act, the anti-profiteering mandate consists of two core obligations:

  • To pass on any benefit of reduction in rate of tax to the recipient; and
  • To pass on any benefit arising from availability of input tax credit under GST through commensurate reduction in prices.

In real estate cases, the standard analytical method adopted by the DGAP is to:

  1. Compare the ratio of ITC to turnover (or purchase value) in the pre-GST regime; with
  2. The same ratio in the post-GST regime.