The National Anti-Profiteering Authority (NAA) imposed a penalty on M/s Adarsh Thought Works Pvt. Ltd., under Project ‘Sky Terraces’ denied the benefit of Reduced Input Tax Credit (ITC) to Flat Buyers.
The Applicant, Jai Prakash Garg alleged profiteering by the Respondent, M/s Adarsh Thought Works Pvt. Ltd. in respect of the purchase of a flat in the Respondent’s project ‘Sky Terraces’, located at Jaipur. The Applicant had alleged that the Respondent had not passed on the benefit of Input Tax Credit (ITC) which had accrued to him, by a commensurate reduction in the price of the flat, after implementation of GST.
The Screening Committee held that the Respondent had availed ITC. Hence the above Applicant had rightly claimed that he was entitled to the benefit of ITC and since the Respondent had failed to pass on this benefit he had contravened the provisions of Section 171 of the CGST Act, 2017.
The DGAP reported that the additional ITC of 5.38% of the taxable turnover should have resulted in commensurate reduction the base prices as well as cum-tax prices of the flats the benefit of which as per the provisions of Section 171 of the CGST Act, 2017, is required to be passed on to the recipients/flat buyers by the Respondent.
The mathematical methodology employed by the DGAP to compute the benefit of additional ITC which is required to be passed on by the Respondent to his buyers is appropriate, logical, reasonable and in consonance with the provisions of Section 171 (1) of the CGST Act, 2017 hence, the same can be relied upon. The above mathematical methodology has also been carefully considered and approved by this Authority in all such cases where the benefit of additional ITC is required to be passed on.
The NAA observed that the M/s Adarsh Thought Works Pvt. Ltd. denied the benefit of Input Tax Credit (ITC) to buyers of flat under Project ‘Sky Terraces’. So the penalty under Section 171(3A) read with Rule 133 (3)(d) of the CGST Act, 2017 is imposed.
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