Karnataka RERA Orders Casagrande Garden City To Refund Rs 52.74 Lakh To Homebuyer Over Unfair GST Charges

The Karnataka Real Estate Regulatory Authority (KRERA) has directed Casagrande Garden City Builders Private Limited to refund Rs. 52.74 lakh to a Bengaluru homebuyer after finding that the builder indulged in unfair trade practices by repeatedly changing the cost breakup and inflating the GST component. The order was passed by a bench headed by Member G.R. Reddy, who noted that the conduct of the promoter was manifest on record. Recording its finding, the authority said the builder had failed to give the homebuyers a written and consistent cost statement.It observed, “The Respondent is refusing to give in writing the cost breakup for certain compliance and tax purposes. The respondent/builder keeps changing the amount shown under different heads, including GST. The Respondent is indulging in unfair trade practices, which is manifest on record, and the evidence, CD conversation, and electronic evidence produced are proving the fact stated in the complaint. Therefore, the Respondent is liable to refund the booking amount, franking charges and TDS deducted along with interest as per Section 18 of RERA Act.” The case relates to a flat booked in the “Viva City” project at Electronic City, Bengaluru. The homebuyers entered into an agreement for sale on May 27, 2024, and paid a booking and advance amount of about Rs. 33.50 lakh. At the time of booking, the builder showed the GST liability as Rs. 8.57 lakh and the total flat cost as Rs. 79.98 lakh. The homebuyers later found that the actual GST payable was only Rs. 3.81 lakh. By then, they had already paid Rs. 32.99 lakh towards the sale consideration, spent Rs. 41,650 on franking charges, and deposited Rs. 30,476 as TDS, which the builder had agreed to adjust against future demands. Before the authority, the homebuyers argued that despite repeated requests, the builder refused to give an official and final cost breakup. They alleged that the figures under various heads, particularly GST, kept changing and that the inflated GST was being used to push up the overall price of the flat. This, they said, left them with no clarity on what they were actually being asked to pay. Agreeing with the homebuyers, the authority held that the claim remained unchallenged as the builder did not file any written objections. Referring to apex court rulings on Section 18 of the RERA Act, the authority reiterated that an allottee has an unqualified right to seek a refund of the amount with interest when the promoter/developer violates its obligations. Therefore, in the present case, the authority concluded that the builder was liable to refund the booking amount, franking charges, and TDS, along with interest. It accordingly directed Casagrande Garden City to refund Rs. 52.74 lakh, calculated with interest at SBI MCLR plus two percent, within the time stipulated in the order. Case Title: Ramkumar & Anr Versus Casagrande Garden City Builders Private LimitedCitation: 2026 LLBiz RERA (KA) 3 Case Number: Complaint No. 00729/2024Click Here To Read/Download Order

Karnataka RERA Orders Casagrande Garden City To Refund Rs 52.74 Lakh To Homebuyer Over Unfair GST Charges

Aryan Raj

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