Excess GST ITC Benefit Given to Some Homebuyers Cannot Offset Shortfall to Others: GSTAT Holds Real Estate Company Liable [Read Order]

In a recent ruling, the Principal Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) at New Delhi held that company failed to pass on full GST input tax credit (ITC) benefit to eligible homebuyers in its real estate project “AMAATRA HOMES” at Greater Noida West, Uttar Pradesh.

The case was under Section 171 of the Central Goods and Services Tax Act, 2017, which deals with anti-profiteering. The complaint was filed by Vijay Pal Singh, who had booked Flat No. J-503 in the project. He alleged that after GST came into force, the builder did not reduce the price by passing on the ITC benefit.

The Directorate General of Anti-Profiteering (DGAP) investigated the matter. After the Delhi High Court ruling in Reckitt Benckiser India Pvt. Ltd. v. Union of India, the matter was re-investigated using the method laid down for real estate anti-profiteering cases.

In its fresh report dated 9 January 2025, the DGAP found that Nandi Infratech had received additional ITC benefit of 2.88% in the post-GST period. It calculated the total additional ITC benefit at Rs. 2,85,65,537 and worked out the saving at Rs. 27.60 per sq. ft.

The DGAP found that 588 pre-GST buyers were covered in the calculation. It also observed that the builder had already passed on ITC benefit of Rs. 5,89,32,169 to these buyers through credit notes, no-dues certificates and no-objection certificates.

However, the DGAP pointed out that excess benefit given to some homebuyers cannot be adjusted against short benefit given to others. It found that 11 buyers had received less benefit and Rs. 1,24,893 was still payable to them. It also found that 50 buyers had not received any ITC benefit and Rs. 13,54,223 was payable to them. The total balance profiteered amount was Rs. 14,79,117.

The respondent argued that ITC is not a profit but only a set-off of tax paid in the supply chain. It also argued that the DGAP’s method did not consider cost increase, construction stage, procurement pattern and timing difference between ITC and customer collections.

The applicant argued that his allotment was wrongly cancelled and the builder had retained his money. The tribunal observed that this issue does not fall under Section 171 of the CGST Act and such dispute has to be raised before the proper forum. It also observed that the applicant had already approached RERA authority.

Justice Mayank Kumar Jain (Judicial Member) and Anil Kumar Gupta, (Technical Member) observed that the respondent later accepted the DGAP report dated 9 January 2025 through its submissions dated 20 April 2026. In view of this, the tribunal held that the respondent had violated Section 171 by not passing full ITC benefit to eligible homebuyers.

The tribunal explained that anti-profiteering benefit has to be passed buyer-wise. It pointed out that excess ITC benefit given to some homebuyers cannot offset shortfall to others.

The tribunal accepted the DGAP report and held that Nandi Infratech had profiteered Rs. 14,79,117. It directed the builder to pass on the remaining benefit to eligible homebuyers with 18% interest from the date of collection of higher amount till the date of refund.

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