Radicon Infrastructure & Housing denies benefit of ITC to buyers of Flat under Project ‘Vedantam’: NAA imposes Penalty [Read Order]

The National Anti-Profiteering Authority (NAA) observed that the M/s Radicon Infrastructure & Housing Pvt. Ltd. denied the benefit of Input Tax Credit (ITC) to buyers of flat under Project ‘Vedantam’. So the penalty under Section 171(3A) read with Rule 133 (3)(d) of the CGST Act, 2017 is imposed.

The Applicant, Amarjeet Singh Yadav alleged profiteering by the Respondent, M/s Radicon Infrastructure & Housing Pvt. Ltd. in respect of the purchase of a flat in the Respondent’s project ‘Vedantam’, located at Greater Noida, U.P. The Applicant had alleged that the Respondent had not passed on the benefit of Input Tax Credit (ITC) which had accrued to him, by a commensurate reduction in the price of the flat, after implementation of GST and charged GST on the full amount of installment.

The Screening Committee held that the Respondent had availed ITC from July 2017 to January 2018 as per his GSTR-3B Returns and had not paid his output tax liability by cash due to availability of sufficient ITC and hence the above Applicant had rightly claimed that he was entitled to the benefit of ITC and since the Respondent had failed to pass on this benefit he had contravened the provisions of Section 171 of the CGST Act, 2017.

The DGAP had also informed that before the GST was introduced, the Respondent was entitled to avail the CENVAT credit of Service Tax paid on input services and credit of the VAT amount paid on the purchase of inputs but the CENVAT credit of the Central Excise Duty paid on inputs was not available as per the CENVAT Rules. He had further informed that the Respondent had not been charging VAT from his flat buyers and was discharging his output tax liability on deemed 10% value addition on the purchase value of the inputs paid in cash and hence there was no direct relation of turnover reported in the VAT Returns for the period from April 2016 to June 2017 filed by the Respondent with the amount so collected by him from the home buyers.

The NAA observed that the M/s Radicon Infrastructure & Housing Pvt. Ltd. denied the benefit of Input Tax Credit (ITC) to buyers of flat under Project ‘Vedantam’. So the penalty under Section 171(3A) read with Rule 133 (3)(d) of the CGST Act, 2017 is imposed.

This Authority as per Rule 136 of the CGST Rules 2017 directs the Commissioner of CGST SGST UP 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.