GSTAT New Delhi Confirms No Profiteering By IJM Raintree Park, Dismisses Homebuyer's Objections

The New Delhi Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) on 1 April upheld the closure of anti-profiteering proceedings, finding that no additional input tax credit benefit accrued to the developer after the introduction of GST.

A Bench of Judicial Member Mayank Kumar Jain rejected objections raised by a homebuyer against the Director General of Anti-Profiteering's (DGAP) closure report dated 8 January 2025 concerning alleged non-passing of GST input tax credit benefits in a housing project. He held:

“The DGAP has correctly applied the methodology in accordance with the findings of the Hon'ble High Court of Delhi... Accordingly, we hold that the objections raised by the Complainant are misconceived and untenable.”

The dispute arose from a complaint filed by homebuyer Anil Kumar Kota under Rule 128 of the CGST Rules, alleging that IJM Raintree Park Pvt. Ltd. failed to pass on input tax credit benefits in its Raintree Park Dwarka Krishna Phase-II project.

The DGAP, in its original 2020 investigation report, computed profiteering of Rs. 2.96 crore using the then-prevailing input tax credit-to-turnover methodology. However, after the Delhi High Court in Reckitt Benckiser India Pvt. Ltd. v. Union of India disapproved the turnover-based methodology and directed a project-based assessment, authorities reinvestigated the matter.

On reinvestigation, the DGAP found that the ratio of input tax credit availed to purchase value declined from 6.81 per cent in the pre-GST period to 3.34 per cent in the GST period, resulting in a negative differential of 3.47 per cent. It concluded that the developer did not receive any additional tax credit benefit.

The Tribunal upheld the revised computation and held that it aligned with the principles laid down in Reckitt Benckiser. It also noted that the complainant had already received Rs. 64,257 through book adjustment as anti-profiteering benefit.

Accordingly, the GSTAT accepted the closure report and dismissed the complaint.