No “Comparative ITC Benefit” available when project Commenced wholly in Post-GST Period, S. 171 Not Triggered: GSTAT [Read Order]

‘Section 171 of the CGST Act, 2017 applies only in cases involving reduction in tax rate or increase in ITC, particularly in projects spanning pre-GST and post- GST periods’ ruled the GST Appellate Tribunal ( GSTAT ), Principal Bench, Delhi.

Section 171 of the GST ( Goods and Services Tax) Act, 2017 (anti-profiteering provisions) is not triggered where a real estate project commenced wholly in the post-GST period, as there is no “comparative ITC benefit” available for passing on to buyers.

In Pyramid Infratech Pvt. Ltd matter, the GST Appellate tribunal accepted the DGAP report dated 12.02.2025 and confirmed that no profiteering was established, closing the proceedings against the developer in relation to its project “Urban-67A” in Gurugram, Haryana.

An application was filed by Shri Narendra Singh, a flat buyer. He alleges that Pyramid Infratech had not passed on the benefit of Input Tax Credit (ITC) by way of commensurate reduction in price, in violation of Section 171.

The matter further escalated to the hands of DGAP.

The investigation by the DGAP concluded that no additional ITC benefit had accrued to the developer because the project had commenced entirely after GST implementation. That is there was no pre-GST vs post-GST comparison available to compute any further benefit.

As per the DGAP, profiteering was nil.

According to A. Venu Prasad, Member (Technical member), Section 171 only comes into play when there is a decrease in tax rate or an increase in ITC, which is usually applicable in projects that span both pre-GST and post-GST periods.

The Tribunal found that there was no comparative ITC benefit for passing on because the project started fully under the post-GST period, and as a result, Section 171 could not be used.

The bench also noted the Delhi High Court decision which held that “no benefit of ITC is required to be passed on where both construction and supply take place entirely in the post-GST period.”

Accordingly, the appellate tribunal accepted the DGAP report and held that the builder had not committed any anti-profiteering activity.

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