Some builders are not passing the benefit of input tax credit to the flat or house buyers and are unlawfully profiteering by over-charging GST from them. Acting on one such complaint against a leading builder in the city, the Directorate General of Anti-Profiteering, in its investigation, has found the builder guilty.
By doing so, the builder amassed Rs 1.76 crore accruing on 356 flats under its scheme ‘Arihant Anchal’ by charging 18% GST in lieu of 12% by taking full credit of tax thereby drawing the benefit of Input Tax Credit under GST and not passing the same to the buyers of these 356 flats.
On the basis of this report, the National Anti-profiteering Authority (NAA) has initiated a hearing in the matter, which has been completed in March and the order has been kept reserved.
The report possessed by TOI states, “Section 171 (1) of CGST Act 2017 states that any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices, has been contravened by the builder amounting to Rs 1,76,59,634.”
Repeated e-mails to different addresses of the builder seeking comment on the issue, however, remained unanswered despite reminders.
The DGAP had carried out this investigation following a complaint by a buyer Pramod Agarwal against the builder Arihant Superstructures Ltd.
“The builder charged 18% GST instead of 12% and took full credit of taxes but did not pass this benefit of the same to the buyers under Pradhanmantri Awas Yojna and Mukhymantri Awas Yojna,” the complainant said.
“On this account, the investigation reveals that the builder is required to pass on the additional benefit of input tax credit amounting to Rs 1.76 crore to 356 recipients along with the applicant,” the report stated.
It may be noted that NAA has been dealing with many such complaints involving builders and real estate developers on a panIndia basis.