Anti-Profiteering Provisions Mandate Passing of Transitional ITC Benefits but Exclude Default Allotment Cancellation Interest Claims
Issue
Whether a real estate developer is liable for anti-profiteering actions for failing to pass on transitional Input Tax Credit (ITC) benefits to pre-GST homebuyers, and whether the anti-profiteering jurisdiction extends to deciding interest claims on refunds arising from the cancellation of a flat allotment due to payment defaults.
Facts
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Transitional ITC Benefit Case: A homebuyer booked a flat in the respondent’s project, “Amaatra Homes,” during the pre-GST era and subsequently alleged that the developer failed to pass on the benefit of additional ITC available after the transition to the GST regime.
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Following investigative shifts to the Competition Commission of India (CCI), the Director General of Anti-Profiteering (DGAP) issued a fresh report quantifying the profiteered amount for allottees who booked in the pre-GST period, noting that GST-era bookings already had the benefit embedded in reduced base prices.
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The respondent developer voluntarily accepted the DGAP’s mathematical computation of the profiteered amount during the proceedings.
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Allotment Cancellation Case: A separate applicant booked a specific unit in the respondent’s project but failed to pay subsequent installment demands despite receiving multiple reminders.
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Due to this sustained default, the respondent cancelled the flat allotment, leading the applicant to litigate unsuccessfully before RERA Noida and subsequently file an appeal before the RERA Appellate Authority.
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The applicant then raised a plea before the anti-profiteering forum demanding 18% interest on the monies retained by the developer for over ten years post-cancellation.
Decision
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On Transitional ITC Profiteering: Held in favor of the Revenue. Since the respondent voluntarily accepted the DGAP’s computation, the statutory contravention of Section 171 stands fully established; the developer must pass on the quantified benefit along with 18% interest calculated from the date of collection until the amount is returned.
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On Cancellation Interest Jurisdiction: Held in favor of the Revenue. The statutory scope of anti-profiteering jurisdiction is strictly confined to determining whether a commensurate reduction in prices or ITC benefits has been passed on to a recipient of a supply.
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A dispute centered around an interest claim on retained funds following a default-based allotment cancellation does not involve the passing of tax benefits and falls entirely outside the scope of this forum.
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The applicant’s interest claim was dismissed, with liberty to pursue the remedy before an appropriate legal forum.
Key Takeaways
Absolute Confined Jurisdiction: The anti-profiteering mechanism is not a general consumer grievance forum; its legal mandate is strictly restricted to verifying the passing of tax breaks or rate reductions to active consumers.
Concession Establishes Default: A developer’s voluntary acceptance of the DGAP’s mathematical methodology and profit quantification acts as a legal admission of a Section 171 violation, automatically triggering mandatory interest liabilities.
GOODS AND SERVICE TAX APPELLATE AUTHORITY, NEW DELHI
DG Anti Profiteering, Director General of Anti-Profiteering, DGAP
v.
Nandi Infratech (P.) Ltd
Mayank Kumar Jain, Judicial Member
and Anil Kumar Gupta, Technical Member
and Anil Kumar Gupta, Technical Member
NAPA No. 127 (PB) of 2025
MAY 12, 2026
the Respondent was indulged in profiteering and has contravened the provision under section 171 of Central Goods and Services Act, 2017 (for short “the CGST Act,2017)
5. In the meanwhile, the Hon’ble High Court of Delhi pronounced Judgment in Reckitt Benckiser India (P.) Ltd. v. Union of India 102 GST 495/82 GSTL 344 (Delhi)/(2024) 14 Centex 374 (Delhi), laying down a new methodology for real estate sector.
6. Tenure of the National Anti-Profiteering Authority (for short ‘the NAA’) ended on 30.11.2022. Thereafter, the Competition Commission of India (for short “the CCI”) was empowered to examine matters related to Anti-profiteering with effect from 01.12.2022 vide Notification No. 23/2022-Central Tax dated 23.11.2022.
7. The CCI remanded the matter to the DGAP under Rule 133(4) of the CGST Rules, 2017 to re-investigate the matter in view of the decision given by the Hon’ble High Court of Delhi in Reckitt Benckiser (supra).
8. Pursuant thereto, a notice was issued by the DGAP to the Respondent under Rule 129 of the CGST Rules, 2017, for redetermination of profiteering amount. Considering the submissions made by the Respondent with supporting documents and following the guidelines in Reckitt Benckiser (supra), the DGAP submitted its report dated 09.01.2025 on the basis of the following conclusions: –
| (i) | The Respondent was executing several towers A, B, C, D, E, F, G, H, I & J in their project “AMAATRA HOMES. The Occupancy Certificate (for short “the OC”) for the towers F, G, H & I was issued on 16.01.2020, for the towers B, C & E it was issued on 12.11.2020, for the Tower D it was issued on 18.08.2021 and for the Tower A & J, it was issued on 06.01.2023. |
| (ii) | There were 20 commercial units wherein 19 units were sold and 01 unit remained unsold as on 31.03.2024. There was total 926 residential units, wherein 918 units were sold and 8 units remained as unsold. |
| (iii) | Out of total 937 units, 588 units were booked in preGST period. Therefore, they were considered for investigation. Since, remaining 349 units were booked in GST regime therefore, they were kept out of the purview of the Investigation. |
| (iv) | For 349 units booked in GST era, the Respondent has passed on the benefit by reducing base price which was evident from the builder buyer agreement. The Respondent sold units in GST regime at the rate less than what was charged for those same area flats in preGST regime. Insofar as 588 units booked in pre-GST period was concerned, it was claimed by the Respondent, that the benefit of the ITC has been passed on by way of “Credit Notes”, “no due certificate” and “no objection certificate” obtained from the respective home-buyers. |
| (v) | Owing the pre-GST period, the Respondent was eligible to avail CENVAT credit of service tax paid on the input services. However, CENVAT credit of Central Excise Duty paid on the inputs was not admissible as per the CENVAT Credit Rules, 2004. The Respondent has also claimed VAT for the Pre-GST period from April, 2014 to June, 2017. |
9. The DGAP computed the ratio of credit availed to purchase value “in percentage” as under: –
(Amount in Rs.)
| Sr. No. | Particulars | Pre-GST Period | Post-GST Period |
| 1 | Purchase Value of Goods and Services (Excluding Taxes and Duties) | 82,33,94,051 | 99,18,58,928 |
| 2 | Credit of Central Excise Duty and Service Tax availed | 7,15,01,652 | – |
| 3 | Credit of VAT availed | 2,46,35,772 | – |
| 4 | Total Credit Availed in PreGST Period | 9,61,37,424 | – |
| 5 | ICT of GST Availed | 14,44,00,864 | |
| 6 | Ratio of Credit Availed to Purchase Value (in %) | 11.68 | 14.56 |
10. The Central Government, on the recommendations of the GST Council, had levied 18% GST (effective Rate was 12% in view of the 1/3rd abatement for land value) on construction service, vide notification No. 11/2017-Central Tax (Rate) dated 28.06.2017.
11. On the basis of the prevailing rates of GST and considering the difference of the ratio of credit availed to purchase value, the DGAP computed the profiteered amount as under: –
(Amount in Rs.)
| Sr. No. | Particulars | Pre-GST Period | |
| 1. | Period | A | July, 2017 to April, 2024 |
| 2. | Ratio of Credit availed to Purchase Value as per Table-A above (%) | B | 1168/14.56 |
| 3. | Increase in input tax credit availed post-GST (%) | C | 2.88 |
| 4. | Purchase Value of Goods and Services (Excluding Taxes and Duties) during Post-GST Period | D | 99,18,58,928 |
| 5. | Total Savings on account of additional ITC benefit | E= “D*C/100 | 2,85,65,537 |
| 6. | Total saleable Area/Carpet Area (in Sq. Ft) | F | 10,35,082.50 |
| 7. | Total Saving Per Sq. Ft. | G= “E/F | 27.60 |
| 8. | Total Sold Area (in Sq. Ft) in pre-GST period | H | 6,23,323 |
| 9. | Profiteered Amount | I= “G*H | 1,72,03,701 |
12. The DGAP has considered this fact that the Respondent did pass on the benefit of ITC of Rs. 5,89,32,169/- to 588 home-buyers. This figure was based on documentary evidence of the credit notes issued to respective home buyers along with “no due certificates” and “no objection certificates” obtained from them. The passing of such benefit is tabulated as such: –
| Project:- Amaatra Homes | (Amount in Rs.) | ||||||
| Sr. No. | Category of Customers | No. of Units | Area (in Sq ft) | Profiteering Amt. as per Annex-(incl. GST) | Benefit passed on by the Noticee | Differenc e (Rs.) | Remarks |
| A | B | C | D | F | G | H= “F-G | I |
| 1 | Buyers to whom benefit claimed to have been passed on is less than required to be passed on | 11 | 12,329 | 3,81,114.05 | 2,56,221 | 1,24,893.05 | Profiteering amount still required to be passed on by the Noticee |
| 2 | Buyers to whom benefit claimed to have been passed on is more than required to be passed on | 527 | 5,67,184.50 | 1,75,32,807.26 | 5,86,75,948 | 4,11,43,140 | Excess benefit passed by the Noticee |
| 3 | Buyers to whom no benefit of ITC have been passed on by the Noticee | 50 | 43,809 | 13,54,223.81 | 0 | 13,54,223.81 | Profiteering amount still required to be passed on by the Noticee |
| 4 | Post-GST units | 349 | 3,99,879 | 0 | 0 | 0 | Out of purview of AntiProfiteering investigation |
| 5 | Unsold Units | 9 | 11,881 | 0 | 0 | 0 | Unsold Unites |
| Total | 946 | 10,35,082.50 | 1,92,68,145 | 5,86,75,948 | 14,79,116.86 | ||
13. On the basis of the above calculation, the DGAP concluded that although the Respondent had already passed on the benefit of ITC of Rs. 5,89,32,169/- to respective home-buyers however, excess benefit cannot be off-set against the benefit of ITC required to be passed on to the home-buyers, who did not receive the commensurate benefit since each home-buyer is entitled for commensurate benefit. The benefit of ITC required to be passed on by the Respondent to the eligible home-buyer computed to Rs. 14,79,117/-.
14. The Principal Bench of the GST Appellate Tribunal (GSTAT), constituted under sub-section (3) of section 109 of CGST Act, 2017, has been empowered to examine and to adjudicate AntiProfiteering cases w.e.f. 01.10.2024, vide Notification No. 18/2024-Central Tax dated 30.09.2024.
15. Notice was issued to the Applicant and the Respondent calling upon their objections/ written submissions against the DGAP report dated 09.01.2025.
16. The Respondent submitted written submission against the DGAP report which are summarized as under; -.
| (i) | The DGAP’s methodology is flawed and economically unsound. |
| (ii) | Treating Input Tax Credit as a measure of profit/gain is wrong. ITC is merely a statutory set-off that neutralizes past taxes, not a commercial benefit. |
| (iii) | Higher post- GST rates on services create a mechanical ITC increase with zero economic benefit. During the erstwhile service tax era, major services including architectural and planning etc., were chargeable at 15%. However, same services are now chargeable at 18% rate of tax under GST. |
| (iv) | The DGAP completely ignored inflation and cost escalation. Comparing nominal figures across 11 years (April 2013-April 2024) without constant-price adjustments violates accounting principles. |
| (v) | The DGAP completely ignored stage-wise construction. Over 55% of material-intensive procurement occurred pre-GST, so the developer received no ITC benefit for those inputs. |
| (vi) | ITC accrual, procurement, construction progress, and customer collections are not aligned, making the ratio unreliable. |
| (vii) | The DGAP incorrectly included transitional credit. PreGST credit (TRAN-1) was included in post-GST ITC without adjustment. |
| (viii) | The DGAP did not make any verification of ITC reversals. No verification of reversals under Rules 42/43 for exempt supplies or unsold units. |
| (ix) | The comparison made by the DGAP is unequal. Comparing 50 v. 81 months without normalization violates statistical methods. |
17. During the course of the hearing, several persons filed their affidavit including the Applicant, Shri Vijal Pal Singh. One Mrs. Anshul Tyagi also participated in the hearing and her prayer was allowed by us to file objections against the DGAP report. Mrs. Anshul Tyagi did not file any objection and abstained herself from the subsequent hearing.
18. The Respondent with their written submissions filed the details about their status of those persons who have filed affidavits. It is submitted that Mrs. Anshul Tyagi as well as other home-buyers, who have filed their affidavit were neither original Applicant nor interested parties in the present proceedings.
19. Shri Vijay Pal Singh, Applicant booked a unit No. J-503 in tower J of the project with the Respondent. A demand of Rs. 7,48,433/-was raised against her but in spite of repeated reminders, he did not deposit the same. The Respondent accordingly cancelled his allotment. Shri Vijay Pal Singh, Applicant feeling aggrieved with the cancellation of his flat by the Respondent, filed a complaint before UP, RERA. The said Authority decided the matter against the Applicant conclusively upholding the cancellation.
20. Shri Vijal Pal Singh, Applicant, filed his rejoinder against the reply submitted by the Respondent to the effect that: –
| (i) | The contention of the Respondent that the Applicant is not a buyer in the project, which is incorrect. In fact, the Respondent threatened the Applicant to cancel his allotment, if he does not withdraw his complaint and they will charge GST at the rate of 5% instead of 12%. |
| (ii) | The Respondent retained Rs. 40,64,072/-, 90% of total sales consideration for a long period of 10 years. |
| (iii) | The Respondent cancelled the allotment on 26.11.2023 before receiving the OC/CC on 06.01.2023. Therefore, the cancellation is illegal. The Respondent created 3rd party in the property, which is against the spirit of the Provision under Section 152 of the Transfer of Property Act. |
| (iv) | The Respondent has charged 12% GST from all the buyers instead of 5% in pre-GST and post-GST period. |
| (v) | The Respondent did not pay any amount to any home buyer. The claim of the Respondent that he has passed on is Rs. 5,89,32,169/- to 538 home-buyers, which is not verified by the DGAP. |
| (vi) | The DGAP did not investigate the matter in respect of 349 post-GST buyers, though they were charged GST at the rate of 12% instead of 5%. Thus, the Respondent has collected 7% more GST from the buyers. |
21. Mrs. Anshul Tyagi, one of the deponents, despite giving opportunity to file her objections, did not file any objection and never appeared thereafter.
22. It would be pertinent to reproduce our orders passed during the course of hearing, thus: –
| (i) | 02.12.2025 |
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“Respondent submitted that he already passed the benefit of Rs. 5,86,75,946/- to its home-buyers while the disputed amount Rs. 14,79,119.86. the DGAP in its report had already conceded this fact.
The office has placed the signed excel sheet before us stating herein that some home-buyers came forward to claim the benefit has not commensurately passed by the Respondent to them.
The Learned Counsel Sandeep Chillan submitted that a copy of such email be provided to him to examine the matter exhaustively.
Let a copy be provided to the Learned Counsel as well the DGAP, who in turn shall thoroughly examine the matrix made by such home-buyers”.
| (ii) | 09.01.2026 |
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3. Shri Sandeep Chilana, Advocate, Shri Priyojeet Chatterjee, Advocate, appeared on behalf of the Respondent.
4. Present Shri Vijay Pal Singh who claims himself to be a homebuyer and Ms. Abhipriya, Advocate appeared on behalf of Mrs. Anshul Tyagi who claims himself to be homebuyer and submitted that the benefit of reduction of tax has not been passed commensurately by the Respondent to them.
5. At the outset, the Learned Counsel for the Respondent Shri Sandeep Chilana vehemently argued that so far as the case of Shri Vijay Pal Singh and Mrs. Anshul Tyagi is concerned, the Respondent has cancelled the allotment of Shri Vijay Pal Singh in the year 2022, therefore, he is no more a homebuyer and Mrs. Anshul Tyagi was not homebuyer in the list of the Respondent and he was not an Applicant in the investigation conducted by the DGAP. He further submitted that on behalf of above contentions these two so-called applicants have no locus-standie to contest with the matter.
6. On the other hand, Shri Vijay Pal Singh and Ms. Abhipriya, Learned Advocate prayed that they may be given some time to brought their objections on record.
7. In view of the above, Shri Vijay Pal Singh and Learned Counsel Ms. Abhipriya are directed to file their objections within two weeks from today. Copies of the objections be provided to Learned Counsel for the Respondent as well the DGAP.”
| (iii) | 11.02.2026 |
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3. Shri Vijay Pal Singh, Applicant appeared in person along with his Learned Counsel Shri Mukesh Sachdeva.
4. Shri Sandeep Chilana, Advocate assisted by Shri Karan Vyas, Advocate appeared on behalf of the Respondent.
5. On earlier occasion, Shri Vijay Pal Singh, Applicant and Mrs. Anshul Tyagi, one of the home-buyers in the project with the Respondent had appeared in person/through their Counsel.
6. Today, none appeared on behalf of the Mrs. Anshul Tyagi. However, the Learned Counsel had sought time to file their objection but no objection is filed so far.
7. Shri Vijay Pal Singh, Applicant has filed his objection which is taken on record.
8. The Registry has informed us that total number of 25 affidavits have been received so far from the persons claiming themselves to be home buyers with the Respondent.
9. The Learned Counsel for the Respondent submitted that out of the list of these persons, who have submitted their affidavits, S/s Sanjeev Malik, Vikas Kumar and Sanjeev Kumar Sinha are the genuine home buyers who purchased the flats during pre-GST period. Rest of the persons including Shri Vijay Pal Singh, Applicant and Mrs. Anshul Tyagi, have booked their flats during postGST period, therefore, their matter may be dealt separately.
10. We are aware of the fact that some more affidavits may be filed in the future.
11. in view of the above, as a measure of last opportunity 10 days time is granted to other person who intends to file their affidavit. However. It is made clear that the affidavits received after the stipulated time shall not be entertained.”
| (iv) | 19.03.2026 |
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3 . Shri Sandeep Chilana, Advocate appeared on behalf of the Respondent.
4. Shri Vijay Pal Singh, Applicant appeared himself.
5. Ms. Seema Khatri, Advocate appeared on behalf of Mrs. Anshul Tyagi, Applicant.
6. At the outset, learned Counsel for the Respondent submitted that the total number of 52 affidavits have been filed so far, out of these 52 affidavits, 32 persons purchased their flats during GST regime. Shri Vijay Pal Singh, Applicant, purchased the flat during pre GST regime. Further, it is submitted that the Respondent will make earnest efforts to resolve the issue with the homebuyers, who have filed their affidavits on one or another ground. He further submitted that these grounds are out of the domain of this Tribunal. The Respondent is ready to pay the amount after negotiation to the concerned home-buyers.
7. It is also submitted that in so far as the Mrs. Anshul Tyagi, Applicant is concerned, he has approached the Consumer Forum for his redressal and has filed an application under 156(3) Cr.P.C. against the Respondent.
8. Shri Vijay Pal Singh, Applicant, submitted that the offer of the Respondent to pay the interest from the date of cancellation is not accepted to him since the Respondent is retaining his money for a long period of 10 years.
9. The learned Counsel for the Respondent submitted that Shri Vijay Pal Singh, Applicant has approached the RERA authority, Lucknow against the order passed by the RERA Authority, Noida.
10. in view of the above, we are of the view that in so far as the payment of interest after cancellation of flat of Shri Vijay Pal Singh, Applicant is concerned, this issue does not fall under purview of the Section 171 of the CGST Act, 2017. The Applicant may approach the proper forum to address his grievance.”
23. The perusal of the aforesaid orders passed during the course of hearing indicates that the allotment made to Shri Vijay Pal Singh, was cancelled by the Respondent on account of committing default by him. The Applicant approached RERA Authority, Noida against the cancellation made by the Respondent. This fact is not disputed by the Applicant that the RERA Authority, Noida has dismissed his application against which he has approached the RERA Appellate Authority, Lucknow.
24. The sole argument of the Applicant before us that the Respondent retained his money for a longer period of more than 10 years. Therefore, he is entitled to Interest on his deposited money from the Respondent.
25. We observed that the prayer of the Applicant does not fall under the purview of Section 171 of the CGST Act, 2017. The applicant can approach proper forum to address his grievance.
26. It is important to be noted here that after our aforesaid observations the Applicant did not participate in further hearings. None of the person(s), who filed their affidavits during the proceedings did not appear virtually or in person at any stage of hearings.
27. Suffice to say that the contentions of the Applicant and the other persons were dealt with us following the Principle of Natural Justice.
28. After conclusion of the argument, the Respondent submitted a short synopsis denying all the allegations made by the DGAP in its report. However, the Respondent admitted about the computation of profiteered amount made by the DGAP by stating as under: –
“Without prejudice to the Applicant No. 2 locus before this Hon’ble forum, it is humbly submitted that Respondent without prejudice to its right and without acquiescence, purely with a view to bringing a quietus to the lis which has remained pending for nearly seven years is willing to accept the Impugned Report”
29. Since, the Respondent has voluntarily accepted the DGAP report dated 09.01.2025 vide its submissions dated 20.04.2026, therefore, we conclude that Respondent has contravened the provision under Section 171 of the CGST Act, 2017 and has indulged in profiteering. Therefore, the DGAP report deserve to be accepted.
ORDER
30. Accordingly, the DGAP report dated 09.01.2025 is accepted.
31. The Respondent is liable to pay interest on the profiteered amount @ of 18% from the date of collection of the higher amount till the date of the return of such amount as provided under Rule 133(3)(b) of CGST Rules, 2017.
32. The copy of the Judgement be sent to the Jurisdictional Commissioner CGST/SGST for information and necessary action there to.
33. The Judgement is pronounced in open court today.