2026-VIL-34-GSTAT-DEL-NAPA
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SGST Tribunal

GST - Anti-Profiteering, Construction Services - The applicant purchases a flat in the project on 28.05.2018, which is subsequent to the introduction of GST regime on 01.07.2017. The entire construction activity is undertaken only after the execution of the construction agreement, and the entire consideration is paid by the applicant during the GST era. The building permit is received on 17.07.2017 and the TNRERA registration certificate on 23.10.2017 - The applicant alleges that the respondent has not passed on the benefit of input tax credit to him by way of commensurate reduction in the price and has charged GST at 18% instead of 1% applicable to affordable housing - Whether the respondent developer has indulged in profiteering by not passing on the benefit of input tax credit to the flat purchaser in contravention of Section 171 of the CGST Act, 2017 – HELD - The DGAP report concludes that no profiteering has occurred. The ratio of credit availed to purchase value during the pre-GST period was 14.50%, which declined to 14.28% in the post-GST period, resulting in a negative difference of -0.22%, thereby indicating that no incremental benefit accrued to the respondent that required to be passed on - The case is covered by paragraph 128(d) of the High Court of Delhi judgment in Reckitt Benckiser, which holds that when a flat is constructed entirely in the post-GST period and purchased after construction completion by making upfront payment of the full price, no benefit of input tax credit is required to be passed on as the price of the flat would have been fixed after taking into account the input tax credit which became available to the builder in the post-GST period. The allegation regarding the applicability of 1% GST rate for affordable housing is rejected as the concessional rate notification came into effect on 01.04.2019, which is subsequent to the applicant's purchase on 28.05.2018. The applicant has deliberately concealed the fact that he had already raised the same issue before the TNRERA, where the claim was decided against him - The objections raised by the applicant against the DGAP report dated 28.02.2025 are rejected and the DGAP report is accepted – Ordered accordingly
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