GSTAT Principal Bench Upholds Compliance by Paarth Infrabuild in Anti-Profiteering Case, Accepts DGAP Report

In a significant anti-profiteering decision, the Goods and Services Tax Appellate Tribunal (GSTAT) Principal Bench, New Delhi, has accepted the report of the Director General of Anti-Profiteering (DGAP) in the matter of Director General of Anti-Profiteering (DGAP) v. Paarth Infrabuild Pvt. Ltd. The Tribunal found that Paarth Infrabuild Pvt. Ltd. had duly passed on the benefit of Input Tax Credit (ITC) to its home-buyers, thereby complying with the requirements of Section 171 of the Central Goods and Services Tax (CGST) Act, 2017.

The proceedings originated from a complaint by a home-buyer alleging that Paarth Infrabuild Pvt. Ltd. failed to pass on the benefit of ITC by way of commensurate reduction in prices for its project “Paarth Aadyant Lucknow Phase-1.” The complaint was examined by the Standing Committee and referred to the DGAP for detailed investigation. The DGAP’s initial report, after being reviewed by the Competition Commission of India (CCI), was sent back for re-investigation in light of the Delhi High Court’s judgment in Reckitt Benckiser India Pvt. Ltd. v. Union of India.

The DGAP conducted a comprehensive investigation covering the period from 1 July 2017 to 10 November 2022, the date of project completion. The investigation involved a detailed analysis of the ratio of ITC availed to the purchase value of goods and services in both pre-GST and post-GST periods. The DGAP concluded that the respondent had benefited from additional ITC in the post-GST period, resulting in a computed profiteered amount of Rs. 1,70,87,844/- after adjusting for ITC benefits already passed on to certain home-buyers.

During the proceedings before the Tribunal, Paarth Infrabuild submitted evidence that it had passed on ITC benefits totaling Rs. 2,02,53,991/- to eligible home-buyers, exceeding the computed profiteered amount. The DGAP verified these claims based on documentation provided by the respondent. The Tribunal, after hearing both parties and reviewing the record, found that the respondent had indeed complied with the anti-profiteering provisions of Section 171 of the CGST Act, 2017.

The Tribunal accepted the DGAP’s report and held that since the entire benefit had been passed on to the home-buyers, no penalty was warranted under Section 171. However, the Tribunal directed Paarth Infrabuild to calculate and pay interest to the home-buyers within two months, as required under Rule 133(3)(b) of the CGST Rules, 2017. The respondent was also directed to submit a compliance report regarding the payment of interest to the concerned Jurisdictional Commissioners and to provide a copy to the DGAP for any further necessary action.

This order, pronounced by Justice Mayank Kumar Jain (Judicial Member) and Sh. Anil Kumar Gupta (Technical Member) on 26 February 2026, underscores the importance of passing on GST-related benefits to consumers and provides clarity on the compliance obligations of real estate developers under the anti-profiteering framework.