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GST: NAA finds Signature Builders guilty for not passing the benefit of additional ITC to Homebuyers [Read Order]

NAA - ITC - Homebuyers - Signature Builders -Taxscan

The National Anti-Profiteering Authority (NAA) has held Signature Builders guilty for not passing the benefit of additional ITC to the homebuyers but did not impose the penalty.

The applicant, Mr. Abhishek alleged that the Respondent, Signature Builders had not passed on the benefit of additional Input Tax Credit (ITC) to the above Applicant as well as other home buyers who had purchased flats in his Project “Orchard Avenue-93” as per the provisions of Section 171 (1) of the CGST Act, 2017.

The DGAP reported that the Respondent builder had denied the benefit of ITC to the Applicant and other buyers amounting to Rs. 2,58,80,927, pertaining to the period w.e.f  1.07.2017 to 31.12.2018 and had thus indulged in profiteering and violation of the provisions of Section 171(1).

The Authority headed by the chairman, B.N. Sharma held that the Respondent builder had not passed on the benefit of additional Input Tax Credit (ITC) to the Applicant as well as other homebuyers who had purchased flats in his Project “Orchard Avenue-93” during the period from 01.07.2017 to 31.12.2018 and hence, the Respondent has violated the provisions of Section 171 (1) of the CGST Act, 2017.

The authority also clarified that Section 112 of the Finance Act, 2019 specific penalty provisions have been added for violation of the provisions of Section 171 (1) of the CGST Act, 2017 which have come in to force w.e.f. 01.01.2020 vide Notification No. 01/2020 Central Tax dated 01.01.2020, by inserting Section 171 (3A) in the CGST Act, 2017.

The Authority held that 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.

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