NAA Finds Builder guilty of not passing ITC Benefits to Flat Buyers [Read Order]

The National Anti Profiteering Authority ( NAA ) in an application filed by MS Santosh Kumari v M/s Aster Infrastructure held that the methodology adopted by the DGAP to compute credit of central excise after the imposition of GST appeared more rational. Also, the respondent’s computation of 50% of the credit to be passed on the customers for the reason of non-availability of central excise credit was rejected.

The report alleged profiteering by the respondent in respect of the purchase of flats in respondent’s project the ‘Green Court’. It had been alleged that the respondent had not passed on the benefit of the Input Tax Credit to them by way of reduction of the price of flats.

The respondent submitted that he was under the normal scheme of VAT in Haryana and availed the VAT credit under the same. He further submitted that service of construction of affordable housing provided by the respondent was exempt from service tax under the relevant notification and was also not eligible for CENVAT credit under the same. Furthermore, the credit of central excise duty was also not available with the developers in the pre-GST regime and the respondent was ready to pass on the post GST.

The Bench constituting of Members S. Prabhakar, Akshat Aggarwal and Narendra Kumar held that the methodology adopted by the DGAP to compute credit of central excise after the imposition of GST appeared more rational. Also, the respondent’s computation of 50% of the credit to be passed on the customers for the reason of non-availability of central excise credit was rejected.