GSTAT Seeks Proof Of Applicable Pre-GST Service Tax Rate In LIC HFL Care Homes Case

The Goods and Services Tax Appellate Tribunal (GSTAT) at Delhi has narrowed a profiteering dispute involving LIC HFL Care Homes Limited to a single question: what rate of service tax was applicable in the pre-GST regime, and how much tax was actually paid?

A division bench of President Justice (Retd.) Dr. Sanjaya Kumar Mishra and Technical Member A. Venu Prasad, while hearing an appeal by the Director General of Anti-Profiteering, said the disagreement between the parties now centres on the effective service tax rate applicable before GST.

Recording that the issue could be settled only on the basis of documents, the bench noted, “There is some disagreement between the Respondent and the original complainant regarding the rate of the service tax effectively passed on to the consumer.”

The dispute relates to allegations of profiteering in LIC HFL Care Homes' 'Jeevan Ananda' housing project in Bhubaneswar. The DGAP had earlier alleged that the developer failed to pass on benefits arising from input tax credit becoming available after the introduction of GST, even though such credits were not available under the earlier VAT regime.

The Anti-Profiteering Authority had accepted the DGAP's findings and directed the issuance of credit notes to homebuyers, along with interest, noting that all units in the project had been sold before the occupancy certificate was issued.

Before the tribunal, the company's tax representative disputed the computation. He argued that during the pre-GST period, LIC HFL Care Homes was liable to pay service tax only on a portion of the project value, at a concessional effective rate.

According to the submission, service tax was payable at 15 percent on 30 percent of the total value charged to buyers, in line with the abatement applicable at the time. On that basis, he contended that even if profiteering was assumed, the amount could not exceed Rs 1.39 crore, as against the Rs 1.65 crore alleged by the DGAP.

In view of this disagreement, the GSTAT directed LIC HFL Care Homes to file a single-page affidavit within ten days, setting out the service tax rate applicable on the relevant dates of payment in the pre-GST period, along with the corresponding Gazette notifications.

The original complainant was also allowed to file an affidavit with documents showing the exact service tax paid at the time of payment. The bench listed the matter for January 22, 2026, clarifying that the hearing would be confined to these clarifications and that no further arguments on facts would be heard

Case Detail: DGAP vs. LIC HFL CARE HOMES LTD.

Citation: 2026 LLBiz GSTAT (DEL)1

Case Number: W.P.(C)-14644/2022

For Appellant: Advocate Sourabh Kapoor

For Respondent: SSC Anushree Narain and Advocate Yamit Jetley