GSTAT Drops Anti-Profiteering Proceedings Against Ireo Projects “Gurgaon Hills” & “Grand Hyatt Gurgaon Residences”

The proceedings were initiated by Investigation Order No. 14/2019 dated 21.10.2019 issued under Section 171 of the Central Goods and Services Tax Act, 2017, read with Rule 133(5)(a) of the CGST Rules, 2017, to investigate several projects undertaken by the respondents over alleged violations of anti-profiteering provisions. The DGAP carried out a detailed inquiry in relation to two projects, “Gurgaon Hills” by Ireo Pvt. Ltd. and “Grand Hyatt Gurgaon Residences” by Ireo Residences Pvt. Ltd., and submitted its report. Thereafter, a re-investigation was undertaken in compliance with the ruling of the Hon’ble High Court in Reckitt Benckiser India Pvt. Ltd. v. Union of India, which held that no fixed or uniform method could be adopted for determining profiteering in real estate matters and that each project must be examined on its own facts.

In the case of “Gurgaon Hills,” comprising 287 units with a saleable area of 15,48,523 sq. ft., the Occupation Certificate was issued on 29.06.2022. The DGAP found that the ratio of Input Tax Credit to purchase value had declined from 2.96% in the pre-GST period to 1.95% post-GST, based on total credit availed of Rs. 14,36,08,290 before GST and Rs. 1,70,11,835 after GST against purchase values of Rs. 4,85,67,63,482 and Rs. 87,33,34,360, respectively. Since a major portion of the units were sold after receipt of the Occupation Certificate, transactions outside the ambit of GST as per Schedule III read with Paragraph 5(b) of Schedule II, the DGAP concluded that no incremental benefit of ITC had accrued. In relation to the project “Grand Hyatt Gurgaon Residences,” the original development was terminated and through a registered Sale Agreement dated 17.11.2023, ownership of the land and rights in relation to it were transferred to another developer with the agreement of the existing buyers. The new project is yet to be developed, and being a project which commenced post 31.03.2019 was subject to Notification No. 03/2019-Central Tax (Rate) and therefore taxed at either 1% or 5% with no benefit of input tax credits for residential schemes. In such circumstances no benefit had either arisen or is passed on to the buyers in this regard for the benefit of Input Tax Credits.

Issue Raised: Whether this long and momentous proceeding ended at the only issue the Tribunal was left to consider, had either benefit accrued post GST of reduction in the rate of tax or of input tax credits for the respondents and therefore the requirement under Section 171 of the CGST Act, 2017 to pass on.

Tribunal Order: After reviewing the Deputy General Attorney General’s Updated Report dated August 19, 2025 and all the supporting documents, and with consideration of the above and principles put to the attention of the High Court of Delhi, the Peripheral claimed to enable the re-investigation process, the Tribunal concluded that the approach, disclosures, deductions, and other documentation supporting evidence filed were, as a whole, consistent. The Tribunal found that the principles of transactions and returns were suitable for the Tribunal to find the findings and reasons presented to the Tribunal in the Report remained valid.
Thus, the Tribunal ruled that the respondents did not benefit from any reduction in taxes or input tax refund, and section 171 under the CGST Act, 2017 was not satisfied. The anti-profiteering proceedings were dismissed in full; in general, the matter was considered closed, the motion part of the orders was recorded as complete, and instructions were issued to circulate the orders of the Tribunal to the Respondents and the relevant Commissioners for necessary conduct.

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