The Principal Bench of the Delhi GSTAT directed a realtor to refund profiteered input tax credit (ITC) of Rs 40,096 along with applicable interest to 1,865 eligible homebuyers, after confirming that the developer had violated the anti-profiteering provisions under section 171 of the CGST Act, 2017.
The GSTAT ruling has arrived against an appeal submitted via the Director General of Anti-Profiteering (DGAP) against the respondent developer, PAN Realtors Private Limited.
A complaint has been raised by one of the homebuyers who had purchased a property from the realtor before the Standing Committee on Anti-Profiteering, alleging that the realtor had failed to pass on the ITC benefit by way of commensurate reduction in prices concerning construction services supplied in its residential project “PAN Oasis”, located at Sector 70, Noida.
With assurance of a prima facie case, the Standing Committee sent the case to the DGAP to conduct an investigation.
Under the norms specified by the Delhi High Court in Reckitt Benckiser India Pvt. Ltd. v. Union of India (2024), DGPA had conducted its investigation and concluded that the respondent had originated a marginal additional benefit of GST ITC post roll-out of the GST and had not passed on the same to eligible homebuyers.
It was confirmed that 219 units sold after the issuance of the Occupancy Certificate are not included in the current investigation, as they qualify as exempt supplies under the relevant provisions of the Central Goods and Services Tax Act, 2017.
The investigation conducted by the DGAP revealed that the input tax credit (ITC) claimed by the respondent for the PAN Oasis project varied between the pre-GST and post-GST periods. Specifically, the ratio of input tax credit to the purchase value of goods and services was 8.088% during the pre-GST period and increased slightly to 8.097% in the post-GST period, indicating a marginal increase of 0.009% following the rollout of GST.
With the use of area-based methodology to compute incremental benefit for the real estate projects, the DGPA determined the realtor had accrued a total savings of ₹46,507 in the appropriate post-GST period, which translated to a base profiteered of Rs 35,800, to which GST of Rs 4,296 was added, aggregating to a total profiteered amount of ₹40,096 needed to be passed on to eligible homebuyers.
The realtor in the proceedings before the GSTAT, via their advocate Mudiet Mishra, provided written submissions accepting the findings recorded in the report of DGAP and tendered a Demand Draft of Rs 40,096 towards concrete compliance with the amount determined under the DGAP Report.
Technical Member Anil Kumar Gupta cited that the investigation and forthcoming report had made according to the verified statutory Auditor-certified financial statements, and the mathematical calculations, which are not challenged by the respondent and Applicant.
Subsequently, the GSTAT asked the respondent to refund the profiteered amount of Rs 40,096, including interest, as per Rule 133(3)(b) of the CGST Rules, to the 1,865 eligible homebuyers in proportion to the area of their respective units within 30 days from the date of the order.
Also Read: GSTAT: Definition, Members, Reason of Delay, Domino Effect
Before the DGAP and the jurisdictional GST authorities, a compliance report must be submitted by the respondent on the completion of the refund distribution.
| Case Title | PAN Realtors Pvt. Ltd. Vs. DGAP |
| Case No. | NAPA/125/PB/2025 |
| For Petitioner | Mrs Geetika Chib |
| For Respondent | Shri Mudiet Mishra |
| Delhi GSTAT | Read Order |
