The National Anti-Profiteering Authority (NAA), has found M/s DLF Limited guilty of anti-profiteering since benefit of additional ITC available on ‘construction services’ not passed on to the purchaser.
An application was filed against M/s DLF Limited alleging that the respondent had profiteered in respect of sale of flat and also alleged that the respondent had charged GST at 18% on the Preferential Location Charges after receipt of completion certificate and transfer of possession to many residents.
On the basis of the DGAP’s report fresh investigation in respect of three projects namely ‘The Camellias’, ‘The Crest’ and ‘The Ultima’ has been initiated on which the respondent was availing ITC, to determine that the respondent passed on the benefit to the buyers of each project.
The Coram of Mr. Amand Shah, Chairman, Mr. Pramod Kumar Singh, Technical Member and Mr. Hitesh Shah, Technical Member on the basis of DGAP’s report observed that there is no reduction in the tax rate in the post GST period but, the ITC, as a percentage of the turnover available to the respondent during the pre GST period was 0.67%, 2.64% and 2.45% and during the post GST period it was 1.84%, 14.40% and 17.46% for the projects ‘The Camellias’, ‘The Crest’ and ‘The Ultima’ respectively. This confirms that, post GST period the respondent has benefited from additional ITC and the same required to be passed on to the customers.
The Authority has held that “the respondent has denied benefit of ITC to the buyers of the flats and the shops being constructed by him in his project ‘The Camellias’, ‘The Crest’ and ‘The Ultima’ in contravention of the provisions of section 171 (1) of the CGST Act 2017 and has committed an offence under section 171 3A of the above Act.”
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