GSTAT New Delhi Holds No ITC Benefit Arises For Homebuyers In Fully Post-GST Construction

On 2 April, the Principal Bench of the Goods and Services Tax Appellate Tribunal (GSTAT), New Delhi, held that no input tax credit (ITC) benefit was required to be passed on to homebuyers where the entire construction and transaction took place after the Goods and Services Tax (GST) regime came into force.

Judicial Member Justice Mayank Kumar Jain upheld the Director General of Anti-Profiteering's (DGAP) closure report dated 21 August 2025 in DG Anti Profiteering v. Sobha Limited. He observed:

“no benefit of ITC would be available to the Complainants as the price of the flat had been fixed after taking into account the incremental ITC that would have become available to the Respondent subsequent to introduction of GST, if any,”

The complaint had alleged that Sobha Limited, in its “International City” project in Gurugram, failed to pass on GST-era ITC benefits for a duplex villa booked in 2019.

The Tribunal noted that the buyers applied for allotment in June 2019, executed the builder-buyer agreement in July 2019, and all construction and payments were made thereafter under the GST regime.

It also accepted the DGAP's finding that the ratio of credit availed to purchase value declined from 12.26 per cent in the pre-GST period to 11.02 per cent in the post-GST period, indicating that no incremental benefit accrued to the developer.

Holding that the complainants lacked locus to challenge the closure report in these circumstances, the Tribunal found that Sobha Limited had not violated Section 171 of the Central Goods and Services Tax (CGST) Act, which requires passing on benefits arising from tax rate reductions or increased input tax credit to consumers.

Accordingly, the GSTAT concluded that since the project was entirely executed after GST came into force, no anti-profiteering issue arose.