GSTAT Orders ₹1.20 Crore Refund with 18% Interest for ITC Profiteering in Arvind Uplands Project

April 2, 2026 : The Goods and Services Tax Appellate Tribunal (GSTAT), Principal Bench, New Delhi, has directed Ahmedabad East Infrastructure LLP to refund ₹1.20 crore to homebuyers along with interest at 18% per annum, holding that the developer violated anti-profiteering provisions under Section 171 of the Central Goods and Services Tax Act, 2017.

The order, passed by Technical Member A. Venu Prasad on April 2, 2026, arose from a complaint alleging that the developer failed to pass on the benefit of input tax credit (ITC) to buyers in its project “Arvind Uplands I.”

The case was investigated by the Directorate General of Anti-Profiteering (DGAP) for the period between July 1, 2017 and May 31, 2025. The investigation found that while the developer was not eligible to avail ITC under the pre-GST regime, it became entitled to claim ITC on inputs and services after GST came into force. This resulted in additional financial gains which were required to be passed on to buyers through reduced prices.

As detailed in the DGAP’s findings (see table on page 7 of the order), the ratio of ITC to purchase value increased from 8.64% in the pre-GST period to 9.95% post-GST, reflecting a 1.31% additional benefit.

Based on this differential, the DGAP computed the total profiteered amount at ₹1,07,78,857, with an additional GST component of ₹12,93,463, taking the total to ₹1,20,72,320 (as shown in Table B on page 9).

During the proceedings, the developer accepted the DGAP’s computation and expressed willingness to refund the entire amount to the affected homebuyers. The Tribunal, relying on the report and submissions, held that the developer had indeed derived additional ITC benefits which were not passed on.

The Tribunal emphasized that Section 171 imposes a statutory obligation to pass on such benefits at the time of supply itself. It further noted that under Rule 133(3)(b) of the CGST Rules, any amount not passed on must be returned with interest at 18% from the date of collection of the excess amount until the date of refund.

Accordingly, the Tribunal directed the developer to refund ₹1,20,72,320 along with interest at 18% per annum to eligible homebuyers, calculated from the date of collection of the last instalment. Compliance is to be reported within two months.

On the issue of penalty, the Tribunal held that Section 171(3A) of the CGST Act is attracted. However, it clarified that no penalty would be imposed if the profiteered amount is deposited within 30 days of the order, in line with the statutory proviso.

The Tribunal ultimately confirmed the findings of the DGAP and held the developer in violation of anti-profiteering provisions.

Case Title: DG Anti-Profiteering v. Ahmedabad East Infrastructure LLP
Case No.: NAPA/233/PB/2025