Constructor neither benefited from Additional ITC nor there was Tax Reduction in post-GST period, No Profiteering: NAA [Read Order]

Constructor - ITC- Tax Reduction - GST - NAA- Taxscan

The National Anti-Profiteering Authority (NAA), while agreeing with the findings of the Director-General of Anti-Profiteering (DGAP) ruled that the Constructor neither benefited from additional Input Tax Credit (ITC) nor there was tax reduction in the post-GST period, so it does not qualify to be the case of profiteering.

The Applicant, Kapil Dev Sharma filed an application stating that the Respondent, M/s Vikas Park Pvt. Ltd had resorted to profiteering in respect of the supply of construction services related to the purchase of Flat in the Respondent’s project “Hero Homes”. The Applicant had also alleged that the Respondent had not passed on the benefit of Input Tax Credit (ITC) by way of commensurate reduction in the price of the apartment purchased by him.

The issue raised in this case was whether the benefit of reduction in the rate of tax or ITC had been passed on by the Respondent to his recipients.

The DGAP found out that the registration and approval of the project, building Plan, the launching of the project, the allotment of units, receipt of payments, etc. had all taken place in the post-GST regime. Therefore, there was no pre-GST tax rate or ITC structure which could be compared with the post-GST tax rate and ITC. The Respondent would have taken into consideration the benefits of ITC which was available to him post-implementation of GST while fixing the base price.

The DGAP has concluded that in view of the aforementioned findings, it appeared that Section 171(1) of the CGST Act, 2017 has not been contravened by the Respondent in the present case.

The Authority headed by the chairman, B.N. Sharma while agreeing with the findings of the Director-General of Anti-Profiteering (DGAP) ruled that the Constructor neither benefited from additional Input Tax Credit (ITC) nor there was tax reduction in the post-GST period, so it does not qualify to be the case of profiteering.

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