The Competition Commission of India ( CCI ) dismissed the Goods and Service Tax ( GST ) anti-profiteering case against DLF Limited, ruling that there was no violation of Section 171 of the Central Goods And Service Tax ( CGST ) Act, 2017.
The CCI found that DLF did not benefit from additional Input Tax Credit (ITC) post-GST implementation and that there was no reduction in the tax rate.
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DLF Limited, the appellant-respondent, faced allegations from Applicant No.1 under Rule 128 of the CGST Rules, 2017, claiming profiteering related to the purchase of a flat on the 6th floor in the respondent’s project, “The Sky Court,” DLF Garden City, Gurugram.
The Director General of Anti-Profiteering ( DGAP )’s report dated 13.08.2020 covered the period from 01.07.2017 to 31.07.2019. It found that the respondent did not gain extra Input Tax Credit ( ITC ) post-GST, with ITC actually 0.71% lower compared to pre-GST. As the flat was bought after the occupancy certificate, no profiteering was found under Section 171 of the CGST Act, 2017.
Following the DGAP’s report on 31.08.2020, the NAA found discrepancies and ordered a reinvestigation under Rule 133(4) of the CGST Rules. It noted that the investigation should have ended on 16.07.2017, not 31.07.2019, and required recalculation of ITC ratios up to 16.07.2017.
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As directed by the National Anti-Profiteering Authority ( NAA ), the DGAP’s 01.03.2021 report re-examined the respondent’s documents and found no further information was needed. The investigation, covering 01.07.2017 to 31.07.2019, confirmed that units sold before the Completion/Occupancy Certificate were under GST, and ITC was correctly calculated for this period, aligning with Section 171 of the CGST Act. The DGAP recommended accepting the findings.
The Respondent, in submissions dated 25.03.2021 and 24.03.2022, stated no objections to the DGAP’s report and requested its acceptance. Applicant No. 1, in an email dated 04.04.2022, noted that GST was incorrectly charged on his ready-to-move-in flat, and the DGAP’s report did not address this issue.
The Commission found that limiting the ITC calculation to the period from 01.07.2017 to 16.07.2017 would result in a small ITC amount, ignoring the larger ITC available from 17.07.2017 to 31.07.2019. This would be incorrect and against the purpose of Section 171 of the CGST Act. Therefore, the ITC and investigation period considered by the DGAP from 01.07.2017 to 31.07.2019 for calculating profiteering was deemed correct.
Applicant No. 1 argued that GST was wrongly charged on Preferential Location Charges (PLC) after the Completion Certificate was issued. The Commission noted this issue is outside its scope, which focuses on whether ITC benefits were passed on to homebuyers. The Applicant was advised to approach GST authorities and did not claim that ITC benefits were withheld.
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The bench comprising Ravneet Kaur (Chairperson), Anil Agrawal (Member), Sweta Kakkad (Member) and Deepak Anurag (Member) found the case did not fall under Section 171 of the CGST Act, 2017. As there was no additional ITC benefit or tax rate reduction, Applicant No. 1’s application regarding the 18% GST on PLC was dismissed.
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