Syed Ali Hussaini V/s Vasavi & GP Infra LLP {COMPETITION COMMISSION OF INDIA}

Syed Ali Hussaini V/s Vasavi & GP Infra LLP {COMPETITION COMMISSION OF INDIA}:

Date of Order : 01-12-2023

In the case of Syed Ali Hussaini v. Vasavi & GP Infra LLP, the Competition Commission of India (CCI) addressed allegations of profiteering against a construction company regarding the benefit of additional Input Tax Credit (ITC) under GST. Here’s a simplified explanation of the case:

1. Background: Several home-buyers filed complaints alleging that Vasavi & GP Infra LLP, a construction company, did not pass on the benefit of additional Input Tax Credit (ITC) to them. They argued that if the company had indeed received additional ITC benefits, the amount collected as GST from them should have been lower.
2. Investigation and DGAP Report: The Standing Committee on anti-profiteering forwarded the complaints to the Directorate General of Anti-Profiteering (DGAP) for investigation. DGAP conducted an inquiry and found that the company had not submitted any documents to substantiate its claim of passing on the ITC benefit to 41 flat buyers. This lack of documentation prevented DGAP from verifying the company’s claim.
3. Decision of CCI: The Competition Commission of India directed DGAP to further investigate the company’s claim regarding the passing on of ITC benefits to pre-GST buyers and charging a lower rate of GST to post-GST buyers. The DGAP was instructed to reevaluate if necessary and recalculate any profiteered amount. The company, Vasavi & GP Infra LLP, was also mandated to provide full cooperation to DGAP, including furnishing all necessary documents and information during the investigation.
4. Legal Framework: The case was adjudicated under Section 171 of the Central Goods and Services Tax Act, 2017, which mandates that any reduction in the 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.
5. Implications: This ruling underscores the importance of transparency and compliance in passing on the benefits of tax reductions or ITC to consumers. It highlights the regulatory oversight by DGAP to ensure fair pricing practices in the real estate sector under GST laws.

1. Conclusion: The decision by the CCI emphasizes the need for businesses, especially in sectors like real estate, to diligently document and substantiate their claims regarding the passing on of tax benefits to consumers. It also ensures that investigations are thorough and aim to protect consumer interests against unfair profiteering practices.

This case serves as a significant example of how regulatory bodies enforce anti-profiteering measures to uphold fairness and consumer rights within the GST framework.