KOLKATA: The West Bengal Real Estate Appellate Tribunal has ruled that a home buyer cannot reclaim GST from a developer after a property purchase deal has been terminated. Refund requests must be made directly to the GST authority.
In this case, Malabika Bhoumic agreed to purchase a flat at Project ONE-10 on May 25, 2022, and made a partial payment of Rs 9,17,919 towards the total cost of Rs 88,26,140 for the 665 sq ft flat on the 15th floor. The agreement was terminated by the promoter, PS Group Realty Pvt Ltd, on June 16, 2023, due to non-payment of the remaining balance, leading to a request for cancellation and a refund via the regulatory authority.
Following a review, the West Bengal Real Estate Regulatory Authority (WBRERA) directed a refund of Rs 8,17,919, deducting a booking charge of Rs 1,00,000, but imposed a penalty because the developer retained part of the refund as GST.
The promoter contested the regulatory decisions, and after considering the appeals, the tribunal ruled in favor of PS Group, allowing them to deduct Rs 4,20,500 as GST from the refundable amount due to Malabika Bhoumic and overturned the Rs 2,00,000 penalty imposed by WBRERA. The tribunal addressed two appeals against regulatory decisions dated January 24, 2024, and February 25, 2025.
The tribunal, consisting of Justice Rabindranath Samanta (chairperson) and Subrat Mukherjee (administrative member), stated that the promoter is responsible for paying GST on behalf of the allottee when invoices are issued. Therefore, the allottee must seek the tax refund directly from the GST authority. Citing Sections 13(2) and 31(2) of the Central Goods and Services Tax Act, 2017, along with a circular dated December 27, 2022, the tribunal validated the promoter’s payment of GST on behalf of the allottee.
Consequently, the tribunal modified the regulatory order to grant a full refund of Rs 8,17,919 and annulled the Rs 2,00,000 penalty.
