The National Anti Profiteering (NAA) found Caroa Properties guilty of denying additional Input Tax Credit (ITC) to the homebuyers.
The applicant has alleged that the Respondent, M/s Caroa Properties had not passed on the benefit of additional Input Tax Credit (ITC) to the Applicant as well as other home buyers as per the provisions of Section 171 (1) of the CGST Act, 2017.
The DGAP reported that the Respondent had denied the benefit of ITC to the buyers amounting to Rs.9,03,44,071, pertaining to the period w.e.f. July 1, 2017, to December 31, 2018, and had thus indulged in profiteering and violation of the provisions of Section 171 (1) of the CGST Act.
The Authority headed by Dr. B.N. Sharma noted that the Respondent has not passed on the benefit of Input tax Credit (ITC) to the Applicant as well as other buyers who had purchased flats from the Respondent and hence, the Respondent has violated the provisions of Section 171 (1) of the CGST Act, 2017.
The NAA clarified that the Central Government vide Notification No. 01/2020- Central Tax dated January 1, 2020 has implemented the provisions of the Finance (No. 2) Act, 2019 from January 1, 2020 vide which sub-section 171 (3A) has been added in Section 171 of the CGST Act, 2017 under which penalty can be imposed in the case of violation of Section 171 (1) of the CGST Act, 2017.
“Since, no penalty provisions were in existence between the period w.e.f. 01.07.2017 to 31.12.2018 when the Respondent had violated the provisions of Section 171 (1), the penalty prescribed under Section 171 (3A) cannot be imposed on the Respondent retrospectively. Accordingly, the notice dated February 10, 2020, issued to the Respondent for the imposition of penalty under Section 171 (3A) of the CGST Act is hereby withdrawn, and the present penalty proceedings launched against him are accordingly dropped,” the NAA said.
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