GSTAT Principal Bench Holds No Profiteering by Bengal Peerless Housing Under Section 171 CGST Act

The Goods and Services Tax Appellate Tribunal (GSTAT), Principal Bench, has ruled that Bengal Peerless Housing Development Company Ltd. did not contravene Section 171(1) of the Central Goods and Services Tax Act, 2017, in relation to alleged profiteering following the implementation of GST. The Tribunal accepted the Final Investigation Report dated 12 March 2026 submitted by the Director General of Anti-Profiteering (DGAP), concluding that no additional benefit of input tax credit (ITC) accrued to the respondent, and therefore, no amount was required to be passed on to homebuyers by way of price reduction.

Background and Proceedings

The proceedings originated from an Interim Order dated 30 September 2022 issued by the National Anti-Profiteering Authority (NAPA) based on complaints alleging profiteering by Bengal Peerless Housing in its construction services. The matter was remanded for re-investigation in light of the Delhi High Court’s judgment in Reckitt Benckiser India Pvt. Ltd. v. Union of India, which clarified that no fixed formula applies to all profiteering cases and that methodology must be tailored to the facts of each case.

Following this, the DGAP conducted a detailed investigation into the respondent’s projects, focusing on whether any additional ITC benefit had arisen post-GST and whether such benefit was passed on to buyers as required by Section 171 of the CGST Act. The investigation specifically examined the “Digangana Housing Complex” project, as other projects were found to be outside the scope of GST or otherwise not relevant for the period under review.

DGAP Investigation and Findings

The DGAP’s investigation covered the period from 1 July 2017 to 23 February 2021. It analyzed the respondent’s pre-GST and post-GST credit ratios, reviewing statutory returns, books of account, electronic credit ledgers, and Chartered Accountant certificates. The DGAP found that the ratio of eligible credit to purchase value decreased slightly from 10.44% (pre-GST) to 10.08% (post-GST), indicating a reduction of 0.36%.

Based on this analysis, the DGAP concluded that the implementation of GST did not result in any additional ITC benefit to the respondent. Consequently, there was no requirement for the respondent to pass on any benefit to homebuyers, and no profiteering was established under Section 171(1) of the CGST Act.

Tribunal’s Consideration and Final Order

The GSTAT Principal Bench considered the DGAP’s report, the material on record, and the submissions made by the respondent. Notably, the complainants did not appear or file submissions at any stage of the proceedings. The respondent accepted the DGAP’s findings and informed the Tribunal of the status of related writ proceedings before the Calcutta High Court. The High Court clarified that there was no impediment to the Tribunal disposing of the matter based on the DGAP’s final report.

Upon review, the Tribunal found no reason to differ from the DGAP’s conclusions. It formally accepted the DGAP’s Final Investigation Report dated 12 March 2026, holding that no additional ITC benefit had accrued to the respondent and that there was no contravention of Section 171(1) of the CGST Act. As a result, the anti-profiteering proceedings against Bengal Peerless Housing were disposed of, with no further directions issued.

Legal Takeaway

This decision clarifies that, in the absence of any additional benefit of input tax credit arising from GST implementation, there is no obligation under Section 171(1) of the CGST Act for a real estate developer to pass on any benefit to homebuyers. The ruling reinforces the principle that anti-profiteering provisions require a factual determination of benefit accrual, and not every GST transition will result in a liability to reduce prices.

The order was pronounced in open court by Technical Member A. Venu Prasad on 31 July 2026.