2026-VIL-31-GSTAT-DEL-NAPA
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SGST Tribunal

GST - Anti-profiteering - Interest liability on refundable amount – Respondent-Developer derived an additional input tax credit compared to the pre-GST period, which resulted in a profiteered amount that was not reduced in the base or cum-tax prices charged to the buyers - The Developer subsequently agreed to comply with the anti-profiteering report but contested the imposition of interest, contending that interest should either not be levied or should apply only from the date of Completion certificate - Whether a developer is liable to refund the profiteered amount along with interest and from which date the interest becomes payable – HELD - The Respondent is liable to refund the profiteered amount along with interest at 18% per annum from the respective dates of collection of the excess amount. Section 171 of the CGST Act, 2017 creates a statutory obligation to pass on the benefit of tax reduction or additional input tax credit at the time of supply itself. Rule 133(3)(b) of the CGST Rules, 2017 expressly empowers the authority to order return of the amount not passed on by way of commensurate reduction in prices, along with interest from the date of collection of the higher amount till the date of its return. The provision is mandatory in nature - The developer's contention that interest should apply only from the date of Completion certificate is rejected because Section 171 mandates passing on of benefits at the time of supply itself, and retention of such benefit constitutes collection of excess amounts attracting interest from the date of such collection - Where a supplier retains the benefit instead of passing it on to the recipient, the amount retained assumes the character of excess consideration collected from the buyers, and interest in such cases is compensatory in nature ensuring restitution of the time value of money that rightfully belongs to the recipients. The reliance on Rule 133(3)(c), which applies only where recipients are not identifiable or do not claim the amount, is misplaced as all homebuyers are identifiable in the present case – Ordered accordingly
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