The National Anti-Profiteering Authority (NAA) imposed the penalty on M/s Elegant Properties for denying the benefit of Input Tax Credit (ITC) to buyers of flats.
The Applicant, Kamal Nayan Singhania alleged profiteering by the Respondent, M/s Elegant Properties in respect of the purchase of a flat in the project “Elegant Berkeley” situated at, Bangalore North. In the said application the Applicant alleged that the Respondent had not provided any tax invoice for the supply of construction service, charged higher GST @ 18% instead of 12%.
The DGAP observed that the Respondents have collected Rs. 99,00,000/- towards the basic cost of the flats and balance amount of Rs. 6,48,000 representing Service Tax and GST from Applicant No. 1. The Respondent also informed that he will be refunding excess GST amounting to Rs. 90,000 collected from the Applicant.
However, as per the books of account of the Respondent, he had transferred the whole amount to the Sales Account vide journal voucher which showed that the Respondent had not transferred Rs. 6,48,000 into the output tax liability ledgers and consequently not discharged his liability and thus contravened the provisions of Section 76 of the Central Goods and Services Tax Act, 2017 read with relevant Rules and Section 73A of the Finance Act, 1994 read with Section 174 of the Central Goods and Services Tax Act, 2017. The same modality was being followed with other recipients also.
The Authority headed by Dr. B.N. Sharma imposed the penalty under Section 171(3A) read with Rule 133 (3)(d) of the CGST Act, 2017 on M/s Elegant Properties for denying the benefit of Input Tax Credit (ITC) to buyers of flats.
This Authority as per Rule 136 of the CGST Rules 2017 directs the Commissioner of CGST or SGST Karnataka to monitor this order under the supervision of the DGAP by ensuring that the amount profiteered by the Respondent as ordered by the Authority is passed on to all the eligible buyers.
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