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GSTAT Orders ₹31.20 Lakh ITC Refund to 66 Homebuyers
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Goods and Services Tax Appellate Tribunal (GSTAT)taxconsumerreal_estate

GSTAT Orders ₹31.20 Lakh ITC Refund to 66 Homebuyers

October 7, 2026

GSTAT Delhi directs real estate developer to pass on ₹31.20 lakh ITC benefit with 18% interest to homebuyers in violation of Section 18(1) obligations.

GSTAT Upholds Homebuyers' Right to ITC Benefit

The Goods and Services Tax Appellate Tribunal (GSTAT), Delhi Bench, directed Mangalbela Real Estates to pass on ₹31.20 lakh of input tax credit (ITC) benefit to 66 homebuyers along with 18% interest, affirming their rights under Section 18(1) of the CGST Act.

The appeal arose from the developer’s refusal to pass on ITC availed on construction inputs, despite selling under-recovered properties. GSTAT rejected jurisdictional objections and held that homebuyers are entitled to the credit benefit whether the project was tax-liable or not.

The 18% interest rate was imposed to deter unjust enrichment and ensure timely compliance. This decision aligns with multiple precedents recognizing homebuyers as ultimate beneficiaries of ITC in RERA-registered projects.

Real estate developers must now review their refund mechanisms and ensure automated passing-on of ITC benefits to avoid future litigation. This trend indicates growing enforcement of consumer rights under the GST framework.

Practice Areas:taxconsumerreal_estate

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