GSTAT Delhi Orders Panchsheel Buildtech To Return ₹98 Lakh To Homebuyers In Anti-Profiteering Case

The Delhi Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) on 20 February upheld an anti-profiteering charge against Panchsheel Buildtech Pvt. Ltd. and directed it to return Rs. 98 lakh to homebuyers of its three Noida-based residential projects.

Technical Member A. Venu Prasad found the company liable for profiteering for non-passing of the benefit of additional Input Tax Credit to homebuyers as required under Section 171 of the CGST Act, 2017. The Tribunal held that Section 171(3A) of the CGST Act, 2017 applies and a penalty of 10 percent of the profiteered amount would be leviable if repayment was delayed beyond 20 March 2026.

The case arose from complaints filed by multiple homebuyers alleging profiteering by Panchsheel Buildtech in its projects Panchsheel Greens, Pebbles, and Hynish Tower-10. These are ready-to-move projects featuring 2 and 3 BHK apartments.

While a couple of homebuyers withdrew their complaints since “no benefit, monetary or otherwise, including any alleged benefit of ITC under GST laws (Section 171 of the CGST Act, 2017) remained accrued,” one complainant sought reasons for postponement of the decision. The original complaint was filed in 2018 and yet no benefit of ITC had been passed on to the homebuyers for more than six years.

Between 1 July 2017 and 31 March 2024, the Directorate General of Anti-Profiteering (DGAP) investigated Panchsheel Buildtech under Section 171 of the CGST Act, 2017. It recalculated the base prices and measured the excess realization after GST and compared the pre-GST credit to the purchase value for each project and worked out the difference.

The report identified 997 eligible flat buyers: 250 in Pebbles, 161 in Hynish Tower 10, and 586 in Greens. The DGAP calculated the profiteering at Rs. 36,73,818 for Pebbles, Rs. 29,68,382 for Hynish Tower 10, and Rs. 32,30,274 for Greens, totaling Rs. 98,72,474 including GST of Rs. 10,57,765.

As the complainant accepted the DGAP's report, GSTAT took note of all the identifiable recipients, their names and unit details. The Tribunal accepted DGAP quantified profiteering as a percentage of the taxable turnover and directed that the computed profiteered amount be returned to buyers and or deposited in the Consumer Welfare Fund along with interest.

As a compliance measure, GSTAT added that a report may be submitted to the jurisdictional CGST or SGST Commissioner and DGAP within two months.

For DGAP : Additional Assistant Director Suraj Kumar Roy, Inspector Ravi Passi

For Respondent: Chartered Accountant Vinod Gupta, DGM of Panchsheel Buildtech Ms. Seema Tomar