The National Anti-Profiteering Authority (NAA), has found M/s JMD Limited guilty of anti-profiteering since benefit of additional ITC available after introduction of GST on construction service not passed to the purchaser.
The applicant purchased a flat in the respondent’s project ‘JMD Imperial Suits’. An application was filed against the respondent M/s JMD Limited alleging that the respondent had not passed on the benefit of additional ITC available after the introduction of GST on ‘construction services’ by way of commensurate reduction in the price.
The DGAP concluded that during post GST the benefit of additional ITC to the tune of 6.63% of the turnover, has accrued to the respondent and the same was required to be passed on by the respondent to applicant and other eligible recipients, but the respondent failed to do so and contravened Section 171 of the CGST Act.
The Authority observed that ITC, as a percentage of the turnover, that was available to the respondent during the pre-GST period was 3.26%, whereas, during the post-GST period it was 9.89%. this confirms that in the post-GST period, the respondent has benefited from the additional ITC and the same is required to be passed on by the respondent to the eligible flat buyers. The Authority further observed that the computation of the amount of ITC benefit to be passed on by the respondent to eligible flat buyers works out to Rs. 33,35,330/-.
The Coram of Mr. Amand Shah, Chairman, Mr. Pramod Kumar Singh, Technical Member and Mr. Hitesh Shah Technical Member has held that “the respondent has denied benefit of ITC to the buyers of the flats and the shops being constructed by him in his project JMD Imperial Suits in contravention of the provisions of section 171 (1) of the CGST Act, 2017”.
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