GSTAT New Delhi Orders ₹47.71 Lakh Refund In Anti‑Profiteering Case, Holds Penalty Non‑Retrospective

The Principal Bench of the Goods and Services Tax Appellate Tribunal (GSTAT), New Delhi directed Alton Buildtech Pvt. Ltd., a real estate developer, to pass on Rs. 47.71 lakh, along with interest, to homebuyers for failing to transfer GST input tax credit benefits to them.

A Single Bench comprising Technical Member A. Venu Prasad allowed the appeal filed by the Director General of Anti‑Profiteering (DGAP), holding that the developer had engaged in profiteering under Section 171(1) of the CGST Act, 2017. It further clarified that the penalty under Section 171(3A) cannot be applied retrospectively. He wrote:

“the Respondent derived additional ITC benefit of 0.92% during the post‑GST period and failed to pass on the same to the homebuyers, thereby contravening the provisions of Section 171(1) of the CGST Act, 2017.”

The proceedings arose from a reinvestigation report dated 26 March 2025 submitted by the DGAP in respect of the project “Aangan Phase‑I” in Gurugram, where homebuyers alleged that the developer failed to pass on GST‑related input tax credit benefits.

The DGAP found that the input tax credit to turnover ratio increased from 13.80% in the pre‑GST period to 14.72% post‑GST, reflecting an additional benefit of 0.92%. Based on this differential, the profiteered amount was computed at Rs. 47,71,823, inclusive of GST.

The Tribunal recorded that the respondent accepted the findings of the DGAP and expressed willingness to pass on the amount to the eligible buyers. It also noted that the applicants had no objection to acceptance of the report.

On the issue of penalty, the Tribunal observed that Section 171(3A), which provides for imposition of penalty for profiteering, came into force only from 1 January 2020. Since the period of contravention was from 1 July 2017 to 31 March 2019, the provision could not be applied retrospectively.

The Tribunal also noted that an amount of Rs. 2 crore had earlier been deposited pursuant to directions of the Delhi High Court, and clarified that it had no objection if the respondent approached the High Court for return of that amount.

Accordingly, the Tribunal directed:

“The Respondent is directed to pass on the profiteered amount of Rs. 47,71,823/‑ along with applicable interest… within a period of thirty (30) days from the date of this Order.”