DGAP Vs Bengal Emami Housing Ltd. (GSTAT)
Summary: The Goods and Services Tax Appellate Tribunal (GSTAT), Division Bench, Court No. I, considered proceedings arising from an application alleging that Bengal Emami Housing Ltd. had failed to pass on the commensurate benefit of additional input tax credit (ITC) in respect of its “Swan Court” project. The proceedings followed complaints by homebuyers and directions for re-investigation in light of the Delhi High Court judgment in Reckitt Benckiser India Private Limited Vs Union of India & Ors.
The original DGAP report dated 13.12.2024 had alleged profiteering of ₹13,35,51,188/- including GST. The Respondent challenged the methodology and principally contended that the project was a joint venture with the West Bengal Housing Board and comprised LIG, MIG and HIG categories. According to the Respondent, prices of LIG and MIG units were governed by the West Bengal Government pricing notification and were capped at rates permitting recovery only of direct costs, leaving no commercial discretion to increase or reduce those prices.
Following the Respondent’s submissions, the DGAP accepted cost-escalation workings supported by a Chartered Accountant’s certificate and allowed ₹5,08,25,698/- towards cost escalation. The revised computation reduced the total profiteering amount, including GST, to ₹7,89,20,586/-. Revised buyer-wise material was also considered, including customer correspondence, credit notes, application forms, customer ledgers and other supporting documents. The DGAP consequently determined a residual amount of ₹2,16,72,591/- requiring passing on.
