Anti-Profiteering authority directs builder to return GST ITC benefit of ₹79.94 lakh plus interest: GSTAT mandates 18% interest to Homebuyers [Read Order]

The GST Appellate Tribunal (GSTAT) has confirmed the findings of the Director General of Anti‑Profiteering (DGAP) and directed a Hyderabad‑based builder, Vasavi and GP Infra LLP, to refund ₹79.94 lakh representing unpassed GST ITC benefits to homebuyers of its Vasavi GP Trends project.

The Tribunal also mandated payment of 18% interest on the profiteered amount under Rule 133(3)(b) of the CGST Rules, 2017, reinforcing that builders must pass on tax‑credit gains through commensurate price reductions.

The proceedings arose from complaints filed by two homebuyers, Syed Ali Hussaini and Vepachedu Bhargav, alleging that the developer had not reduced prices commensurately after availing additional ITC benefits under GST. The Standing Committee on Anti‑Profiteering referred the matter to the DGAP for investigation under Rule 129 of the CGST Rules.

Following multiple rounds of hearings and re‑investigation, the DGAP’s final report dated 13 March 2026 concluded that the respondent gained an additional ITC benefit of ₹294.84 per sq ft, amounting to ₹1.51 crore, but had only partially passed it on to buyers. The balance profiteered amount of ₹71.37 lakh (exclusive of GST) was ordered to be refunded with 18% interest from the date of collection until actual payment.

The Tribunal upheld the DGAP’s methodology comparing ITC ratios to construction cost in pre‑ and post‑GST periods, observing that the benefit under GST covers both goods and input services. It rejected the builder’s plea to exclude service‑related ITC, citing the Delhi High Court’s ruling in Reckitt Benckiser India Pvt. Ltd. v. Union of India.

It also noted that while some buyers denied receiving ITC benefits via email, documentary evidence, such as ledgers and credit notes, proved that the benefit had been adjusted against their dues, constituting valid compliance under Section 171.

The Tribunal directed the respondent, Vasavi and GP Infra LLP to refund the profiteered amount of ₹71,37,747 plus GST ₹8,56,530, aggregating to ₹79,94,277, to the identified homebuyers within three months, and to report compliance to the jurisdictional Commissioner and the DGAP.

The bench comprising Justice (Retd.)  Sanjaya Kumar Mishra (President) and Shri A. Venu Prasad (Member Technical), confirming the findings of the Director General of Anti‑Profiteering (DGAP).

The bench observed that “the said amount shall be passed on along with interest at the rate of 18% per annum, in terms of Rule 133(3)(b) of the Central Goods and Services Tax Rules, 2017, from the date of collection of the higher amount from the buyers till the date of its actual refund. Compliance of this Order shall be reported to the jurisdictional Commissioner within a period of three months from the date of this Order, with a copy to the DGAP “.

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