2026-VIL-19-GSTAT-DEL-NAPA
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SGST Tribunal

GST - Anti-Profiteering, Real Estate – Methodology for Calculating Profiteering Amount – Respondent-builder claimed that full and commensurate input tax credit benefit had been passed on to all eligible homebuyers and that the DGAP methodology for calculating profiteering was fundamentally flawed - DGAP had computed profiteering amount by adopting a methodology based on the difference between the ratio of input tax credit to turnover under the pre-goods and services tax and post-goods and services tax periods – HELD - The principles laid down by the Delhi High Court in a similar matter, is that in the real estate sector there is no direct correlation between turnover and ITC availed for a particular period, as expenses in real estate projects are not uniform throughout the life cycle of the project and the accrual of input tax credit is not related to the amount collected from buyers. The proper methodology requires calculating the total savings on account of introduction of goods and services tax for each project and then dividing the same by total area to arrive at the per square feet benefit to be passed on to each flat buyer - The respondent's submissions regarding comparison of goods and services tax availed on actual goods and services purchased in the post-GST period with the input tax credit available on such goods and services by applying applicable rates in the pre-GST period carry weight. The DGAP report is set aside and the matter is remanded for re-investigation. The DGAP shall grant proper and adequate opportunity to the Respondent regarding production of documents for a comparison and such comparison shall be given adequate consideration while re-calculating the amount of profiteering – Ordered accordingly
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GSTAT Appeal filed wrongly...
By CA Vivek Jalan

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