The National Anti Profiteering Authority (NAA) has found real estate firm Emaar MGF, a subsidiary of the biggest UAE property developer guilty of profiteering of Rs. 13.35 crore and directed it to return the amount to 1,239 homebuyers of the Gurugram project with 18 percent interest.
The matter involves a complaint from a flat buyer of real estate developers’ scheme ‘Emerald Floors Premier’ at Gurugram (Haryana). The allegation was that the company was availing ITC at the higher rates of GST, which had resulted in the benefit of additional ITC for the developer and was also charging GST from the buyer at 12 percent. This complaint was investigated by the Director-General of Anti-Profiteering (DGAP).
Following an investigation, it found that the ITC as a percentage of the total turnover which was available to the developer during the pre-GST period was 9.08 percent and post-GST period this rose to 20.98 percent. This, according to DGAP, meant that the developer has benefited from the additional ITC to the tune of 11.9 percent. It was not passed to the buyer and even the price of the flat was not lowered, the investigation report said.
The DGAP also submitted that the amount of benefit which has not been passed on to the buyers or the profiteered amount came to Rs. 13.35 crore from 1,239 flat buyers including the complainant.
The Authority headed by the Chairman, B.N. Sharma, and Members J.C. Chauhan and Amand Shah have ruled that the realty firm has benefited from additional Input Tax Credit (ITC), which is 11.90 percent of turnover between July 2017 and March 2019.
Based on a complaint filed by a home buyer in the Emerald Floor Premier project and an investigation report of Directorate General of Anti Profiteering (DGAP), the NAA in its ruling said Emaar MGF has Profiteered an amount of Rs 13.35 crore.
The Anti-Profiteering Watchdog directed the Emaar MGF to pass on an amount of Rs. 13,35,79,636 and the amount of Rs 1,04,734 along with interest @18 percent annum from the dates from which the amount was collected by him from homebuyers of Emerald Floors Premier Project till the payment is made, within a period of 3 months from the date of passing this order.
“The respondent shall reduce prices to be realized from buyers of the flats, commensurate with the benefit of ITC received by him… the respondent is directed to pass on Rs 13.35 crore to flat buyers, along with 18 percent interest per annum, within a period of three months,” the NAA said in the order.To Read the full text of the Order CLICK HERE