GSTAT New Delhi Finds No Profiteering By Samridhi Realty After Excess ITC Benefit Passed To Buyers

The New Delhi Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) on 2 April, held that there is no contravention of anti-profiteering provisions where a developer has already passed on input tax credit (ITC) benefits to homebuyers in excess of the amount required under Section 171 of the CGST Act.

A Division Bench of Justice Mayank Kumar Jain and Technical Member Anil Kumar Gupta disposed of proceedings against Samridhi Realty Pvt. Ltd. and accepted the Director General of Anti-Profiteering's (DGAP) closure report. It held:

“The amount claimed by the complainants has been duly paid to them by the Respondent which is duly acknowledged by them. No other home buyer raised any objection against the DGAP report dated 05.12.2024.”

The complaints related to flats booked in the “Samridhi Grand Avenue” project in Greater Noida West. The homebuyers alleged that the developer had not passed on the benefit of additional ITC arising after the introduction of GST from 1 July 2017.

Following a reinvestigation ordered pursuant to the Delhi High Court's decision in Reckitt Benckiser India Pvt. Ltd. v. Union of India, the DGAP recalculated the alleged profiteering. It found that although the developer had received an additional ITC benefit of 4.19 per cent in the post-GST period, it had already passed on ITC benefits of Rs. 16.45 crore to 935 homebuyers against a computed profiteering amount of Rs. 6.59 crore.

The DGAP concluded that the developer had passed on excess benefit of Rs. 9.86 crore over and above the requirement under Section 171 of the CGST Act.

During the hearing, the developer agreed to pay differential amounts along with interest to the two complainants, which the complainants accepted. The Tribunal recorded that both complainants subsequently acknowledged receipt of the recalculated benefits.

In view of these findings, the Tribunal accepted the DGAP's closure report and closed the proceedings.