GST Appellate Tribunal, New Delhi
DG Anti Profiteering, Director General of Anti-profiteering, DGAP v. Oxford Realty LLP
The ruling in brief
In an ongoing real estate project, buyers who booked units after 30.06.2018 (one year after GST implementation) are also entitled to benefit of additional post- GST ITC, and they cannot be excluded from anti-profiteering computation merely because prices were renegotiated, absent proof of commensurate reduction.
Where profiteered amount and recipients are identifiable from project records and DGAP's buyer-wise computation, amount must be refunded to respective homebuyers and cannot be deposited in Consumer Welfare Fund merely because recovery or contact may be difficult
Excess ITC benefit passed on to some homebuyers cannot be set off against shortfall payable to others, as anti-profiteering provisions require commensurate benefit to be passed to each identifiable recipient individually.
Profiteering in real estate must be computed inclusive of GST as homebuyer is entitled to restitution of entire excess amount paid including GST charged on inflated base price so as to restore position that would have existed had ITC benefit been duly passed on.
Where profiteering is determined on a project-completion basis, interest under Rule 133(3)(b) is payable at 18% per annum from date of payment of last instalment by each eligible homebuyer until date of actual refund
Provisions considered
Section 171 of Central Goods and Services Tax Act, 2017/Delhi Goods and Services Tax Act, 2017 - Rule 126 of Central Goods and Services Tax Rules, 2017/Delhi Goods and Services Tax Rules, 2017; Section 171 of Central Goods and Services Tax Act, 2017/Delhi Goods and Services Tax Act, 2017 - Rule 133 of Central Goods and Services Tax Rules, 2017/Delhi Goods and Services Tax Rules, 2017
This summary is for general information and is not legal advice. Read the full decision and the applicable law before relying on it.