GST: Penalty can’t be levied from S3 Buildwell LL for denying benefit of ITC to Flat purchaser, says NAA [Read Order]

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The National Anti-Profiteering Authority (NAA) found M/s S3 Buildwell LL Private Limited guilty of profiteering but did not impose the penalty for denying the benefit of Input Tax Credit (ITC) to Flat Buyers as no penalty provisions existed when the ITC was denied.

Approximately 71 Applicants alleged profiteering against the respondent, M/s S3 Buildwell LL Private Limited and submitted that the respondent had not passed on the benefit of additional Input Tax Credit (ITC) to the Applicant as well as other buyers who had purchased them in his Project “Florida”, as per the provisions of Section 171 (1) of the CGST Act, 2017.

The Authority headed by the Chairman Dr. B.N. Sharma held that Section 112 of the Finance Act, 2019 specific penalty provisions have been added for violation of the provisions of Section 171(1) which have come into force w.e.f. 01.01.2020, by inserting Section 171(3A).

“Since, no penalty provisions were in existence between the period w.e.f. 01.07.2017 to 30.06.2018 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the notice dated 15.05.2019 issued to the Respondent for imposition of penalty under Section 122(1)(i) is hereby withdrawn and the present penalty proceedings launched against him are accordingly dropped,” the NAA said.

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