Builder held Guilty of Profiteering by NAA [Read Order]

The National Anti Profiteering Authority ( NAA ) in the matter of Sh Paval Antony v. M/s Shree Mahalakshmi Enterprises in case no. 58/2019 held the respondents to be guilty of profiteering.

The Respondent had started construction of the project ‘Risington’ in the year 2014 for building 1228 apartments out of which 161 flats have been sold.

The issues for consideration for the present matter are: (1)Whether there was a reduction in the rate of tax on the service provided by the Respondent w.e.f. 01.07.2017 (2)Whether there was any net additional benefit of ITC to the Respondent which was required to be passed on by him to his recipients (3)Whether there was any violation of the provisions of Section 171 of the CGST Act by not passing the above benefits by the Respondent.

It has been alleged that the respondent had not passed on the benefit of Input Tax Credit by the reduction in the price of the flat after coming into force of the GST to him. He clearly stated that 18% GST is demanded on the cost of land which is the wrong application of the law.

The Bench constituting of BN Sharma, JC Chauhan, R Bhagyadevi and Amand Shah after considering the computational aspects of the rate paid in the pre-GST regime by the respondent with to that paid after GST and other aspects ruled the Respondent liable to profiteering.