Around 60 realty firms face GST anti-profiteering cases

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The National Anti-Profiteering Authority (NAA) for goods and services tax is likely to deliver orders, starting next month, in around 60 profiteering cases filed by homebuyers against the builders from across the country. Godrej Properties, Hiranandani Realtors and Salarpuria Sattva are among the prominent builders facing the charges, officials privy to the development said. The Director-General of Anti-Profiteering (DGAP), the investigation arm of the NAA, has submitted probe reports in two-third of the cases to the quasi-judicial body which is hearing the cases. The remaining investigations are likely to be completed soon.

Several projects by builders in Mumbai, Delhi, Bangalore, Chennai, and other metros are under scanner over alleged profiteering by builders not passing on the benefit of input tax credit (ITC) to customers. These include Mumbai-based Godrej Properties’ Panvel project in Navi Mumbai and Surendra Hiranandani-promoted House of Hiranandani’s ‘Amalfi’ project in Chennai. Signature Global, Vatika, Sarvpriya and Suninfra from the National Capital Region and Salarpuria Sattva, a Bangalore-based real estate player, are also facing the profiteering charges.

The complainants have alleged that realtors didn’t pass on the benefit of the ITC to the customers and instead profiteered from the credits. ITC benefits were being availed by the builders on the inputs such as cement and steel used for the construction of houses. In most cases, the benefit of an additional ITC of about 5-6% of the taxable turnover accrued to developers was not passed on to the customers.

“If a homebuyer wins the case, around 5% relief works out to be Rs 1 lakh for a homebuyer, who buys a home worth Rs 20 lakh. This kind of substantial amount makes it worthwhile for homebuyers to approach anti-profiteering authorities,” an official said. More people are likely to approach anti-profiteering authorities as awareness about it increases, he added.

Most of these cases pertain to previous ITC regime prior to April 1. The ITC mechanism in GST was introduced for the sector to prevent the cascading effect of the tax. However, since most builders were reportedly not passing on the ITC of GST to customers, the Centre eventually had to withdraw it from April 1 for the real estate industry in lieu of a reduction in overall GST rates for the sector to provide relief to the homebuyers.

Read More at: https://www.dnaindia.com/business/report-around-60-realty-firms-face-gst-anti-profiteering-cases-2793359