GSTAT Confirms Rs 1.20 Crore Anti-Profiteering Demand Against Ahmedabad Developer for Withholding ITC Benefits from Homebuyers
The GST Appellate Tribunal has upheld a finding that Ahmedabad East Infrastructure LLP failed to pass on input tax credit benefits to homebuyers after the introduction of GST, directing the developer to refund Rs 1,20,72,320 along with interest at 18 per cent from the date the excess amount was collected. Technical Member A. Venu Prasad, sitting on the Principal Bench, confirmed by order dated 2 April 2026 the conclusions reached by the Directorate General of Anti-Profiteering and held the developer in violation of the anti-profiteering mandate under Section 171 of the Central Goods and Services Tax Act, 2017.
The investigation had established that the developer’s input tax credit ratio increased by 1.31 per cent following the transition to the GST regime — a quantifiable benefit that, under Section 171, was required to be passed on to recipients by way of commensurate reduction in prices. The developer, represented by Advocate Chintan Vasa, did not contest the computation and agreed to refund the amount. Praveen Kumar appeared for the applicants.
The Tribunal directed refund with interest at 18 per cent under Rule 133(3)(b) of the CGST Rules, reasoning that the obligation to pass on the benefit crystallises at the time of supply and not at any subsequent point. It further held that penalty under Section 171(3A) was leviable, subject to the statutory proviso that governs its imposition.
The order reinforces the Tribunal’s consistent position that the anti-profiteering mechanism under Section 171 operates as a mandatory pass-through obligation, not a discretionary one, and that even where the respondent does not dispute the computation, interest liability accrues automatically from the date of collection. For the real estate sector — which has generated the bulk of anti-profiteering complaints since 2017 — the ruling serves as a reminder that any post-GST enhancement in ITC ratios must be reflected in pricing contemporaneously with the supply, and that belated compliance after an investigation does not extinguish the interest and penalty consequences.