2026-VIL-11-GSTAT-DEL-NAPA
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SGST Tribunal

GST - Anti-Profiteering – Calculation of Profiteering amount - DGAP alleged that the respondent had profiteered by not passing the benefit of Input Tax Credit to the home buyers through commensurate reduction in the prices of the flats – HELD - The profiteered amount should be calculated by considering the total savings on account of the introduction of GST for each project and then dividing the same by the total area to arrive at the per square feet benefit to be passed on to each flat buyer - The respondent had admitted to profiteering in its earlier submissions before the erstwhile National Anti-profiteering Authority (NAA) and the Delhi High Court. These judicial admissions are conclusive and cannot be reverted unless the respondent demonstrated that they were incorrect or made under a wrong assumption of fact - The respondent is liable to pay the profiteered amount along with 12% GST to the home buyers. The respondent is directed to pay interest at the rate of 18% on the profiteered amount from the date of payment of the last installment by each home buyer – Ordered accordingly - Methodology for determining profiteering – There is no fixed/uniform method or mathematical formula can be laid down for determining profiteering, and the determination of the profiteered amount has to be computed by taking into account the relevant and peculiar facts of each case - The DGAP had calculated the profiteering based on the total pre-GST period up to June 2017 and the post-GST period from July 2017 to November 2019. The DGAP had considered the total purchase value of goods and services for the project, the ratio of ITC to the purchase value in the pre-GST and post-GST periods, and the total area of the project to arrive at the profiteered amount per square feet, which was then multiplied by the total sold area to determine the total profiteered amount - The methodology adopted by the DGAP was in line with the principles laid down by the Delhi High Court, where the court had directed the authority to calculate the total savings on account of the introduction of GST for each project and then divide the same by the total area to arrive at the per square feet benefit to be passed on to each flat buyer - The Tribunal rejected the respondent's contention that the DGAP's methodology was flawed and that the profiteered amount should be limited to the ITC on construction materials (goods) and not on input services. The Delhi High Court's judgment did not limit the ITC benefit to goods alone and that any benefit of reduction in tax rate or ITC, whether on goods or services, must be passed on to the consumers - The Tribunal upheld the methodology adopted by the DGAP in calculating the profiteered amount
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