GSTAT New Delhi Directs Bengal Emami Housing To Pass On ₹70.58 Lakh ITC Benefit To Homebuyers

The Delhi Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) has directed Bengal Emami Housing Ltd. to pay ₹70.58 lakh, including GST, to eligible homebuyers of its “Swan Court” project in Kolkata on account of additional Input Tax Credit (ITC) benefit.

The Division Bench comprising President Justice Sanjaya Kumar Mishra and Technical Member Anil Kumar Gupta held that the profiteering computation should be confined to the Higher Income Group (HIG) category.

The proceedings arose from a complaint alleging that Bengal Emami Housing had failed to pass on the benefit of ITC to homebuyers.

The Directorate General of Anti-Profiteering (DGAP) had initially determined profiteering at ₹13.35 crore. After re-examination, including consideration of the Respondent's cost-escalation claim and the benefit already passed on to buyers, the DGAP revised the amount to ₹2.16 crore.

Bengal Emami Housing argued that the prices of the Lower Income Group (LIG) and Middle Income Group (MIG) flats were fixed under a West Bengal Government notification and that it had no discretion to increase or reduce those prices. It also submitted that the notification permitted recovery only of direct costs.

Accepting the contention, the Tribunal held that the pricing mechanism for LIG and MIG units was materially different from that applicable to HIG units.

It observed that the Respondent had no commercial discretion to load overheads, administrative expenses or other indirect costs into the sale price of LIG and MIG units.

"..we find merit in the Respondent's contention that the prices of the LIG and MIG units were statutorily capped and restricted to the recovery of direct costs, whereas the associated overheads, administrative expenses and tax components were to be borne by the Respondent. The pricing mechanism applicable to the LIG and MIG units was, therefore, materially different from that applicable to the HIG units.", the Court said.

Accordingly, the Tribunal held that no profiteering could be attributed to the LIG and MIG categories and restricted the computation to HIG units.

The Tribunal further held that the Respondent was liable to pay interest at 18% per annum on the amount from the date of collection of the higher amount until its refund.

"The Respondent is hereby directed to pass on the profiteered amount of ₹70,58,488/- (inclusive of GST), to the eligible homebuyers, as identified in the DGAP Report dated 15.04.2026 in Annexure-1 for HIG category...", the Court said.

It also held that a 10% penalty was leviable under Section 171(3A) of the CGST Act. However, the penalty would stand waived if the Respondent passed on the entire profiteered amount to eligible homebuyers within 30 days of the order.

The Tribunal accordingly directed Bengal Emami Housing to pass on ₹70.58 lakh along with 18% interest to the eligible HIG homebuyers.

For Appellant: Shri Harkesh Meena, Learned Assistant Commissioner, assisted by Shri Praveen Kumar, Learned AAD

For Respondent: Shri Arvind Baheti, Chartered Accountant