GSTAT Delhi Says Pan Realtors Not Liable For Profiteering On Flat Sales After Occupancy Certificate

The Delhi Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) has held that, in this case, no issue of profiteering arose in respect of residential units sold after the issuance of an occupancy certificate in Pan Realtors Private Limited's Noida project while closing a buyer's complaint relating to alleged input tax credit benefits under GST.

The tribunal, however, closed the complaint after recording the developer's undertaking to refund the computed profiteered amount of over Rs 40 thousand for units sold before the occupancy certificate.

A single-member bench of Technical Member Anil Kumar Gupta accepted the findings of the Director General of Anti-Profiteering and agreed that units sold after the occupancy certificate could not be examined under anti-profiteering provisions.

Under GST law, the sale of units after completion of construction and issuance of an occupancy certificate is treated as a sale of immovable property rather than a supply of construction service, making such transactions exempt from GST.

The tribunal recorded that such units were “outside the scope of the present investigation, being exempt supplies” under the CGST Act, 2017.

The complaint was filed by a flat buyer in Pan Realtors' Pan Oasis project in Sector 70, Noida, alleging that the developer had not passed on the benefit of input tax credit through a commensurate reduction in price. The project comprises 2,084 units, including 2,051 flats and 33 shops. The occupancy certificate was issued on 17 January 2018. Of these, 1,865 units were sold before the certificate was granted, while 219 units were sold thereafter.

Following a reinvestigation directed in light of the Delhi High Court's ruling in Reckitt Benckiser India, the DGAP examined the project on an area-based methodology and confined its analysis to units sold before the occupancy certificate.

It found that the ratio of input tax credit to purchase value increased marginally from 8.088 per cent in the pre-GST period to 8.097 per cent in the post-GST period, resulting in a total profiteered amount of Rs 40,096, including tax, in respect of the eligible pre-certificate units.

Taking note of the developer's unqualified acceptance of the findings, the tribunal recorded that Pan Realtors had agreed to comply with the statutory mandate under Section 171 of the CGST Act. The bench said that “the investigation report dated 10.01.2025 submitted by the Director General of Anti-Profiteering is hereby accepted.” With these directions, the GSTAT disposed of the complaint.