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Respondent has denied benefit of ITC to the buyers of the flats being constructed by him in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and has thus resorted to profiteering.

Anti-Profiteering — Section 171 of the CGST Act, 2017— This report has been received from the DGAP. The Applicant alleged profiteering by the Respondent in purchase of Flat in the “Devaan” project situated at Sector-84, Gurgaon. The applicant alleged that the Respondent had not passed on the benefit of ITC by way of commensurate reduction in the price of the flat. The DGAP submitted that present investigation covered the period from 01.07.2017 to 30.06.2019. Profiteering, if any, for the period post June, 2019, has not been examined, as the exact quantum of ITC that would be available to the Respondent in future could not be determined, when the construction of the project was yet to be completed. The DGAP stated that the provisions of Section 171 (1) of the Act, requiring that a reduction in rate of tax on any supply of goods or services or the benefit of ITC shall be passed on to the recipient by way of commensurate reduction in prices, have been contravened by the Respondent.
Held that:- The Hon’ble Anti-Profiteering Authority ordered that the Respondent shall reduce the prices to be realized from the buyers of the flats/shops commensurate with the benefit of ITC received by him. Since the present investigation is only up to 30.06.2019, the DGAP is directed to further investigate the quantum of ITC benefit under Rule 133 (4), which the Respondent is required to pass to the buyers w.e.f. 01.07.2019 till 30.06.2020 or till the Completion Certificate is obtained by the Respondent whichever is earlier, as the project is still under execution.—Honey Macker, Director General of Anti-Profiteering, Central Board of Indirect Taxes & Customs Vs Pivotal Infrastructure Pvt Ltd. [2020] 25 TAXLOK.COM 062 (NAPA)