The National Anti-Profiteering Authority (NAA) has in its order dated 7th July, 2020, held that the Gaursons Realtech Pvt. Ltd is liable for profiteering of 19.72 Crores and directed the Director General of Anti profiteering (DGAP) to ensure that the profiteered amount is passed on to all buyers.
The Applicant had alleged in his application to the NAA that the Respondent viz Gaursons Realtech Pvt. Ltd had resorted to profiteering while he had sold a flat in his project ‘16 Park View’, situated at Greater Noida to him. The above Applicant had also alleged that the Respondent had charged 12% GST from him on the consideration paid by him before the GST had come into force.
He had further alleged that he had paid the full amount for the purchased flat before the implementation of the GST and got the demand letter in which no GST was charged on the consideration paid before the implementation of the GST, but later on,in July 2017, the Respondent had raised the demand for payment of implementation of the 12% GST from him on the amount paid prior to the imposition of the GST.
The DGAP has observed the contention of the Respondent that he would compute the benefit on account of ITC of GST in respect of the project at the end of the project after making necessary adjustments on account of various contingencies and situation which lead to the reduction/reversal loss of credit in GST in future, might have merit but the profiteering had to be determined at a given point of time.
Therefore, DGAP reported that the additional ITC available to the Respondent and the amounts received by him from the Applicant and other recipients post-implementation of GST had to be taken into account to determine the benefit of ITC that was required to be passed on.
The Authority consisting of the Members J.C. Chauhan and Amand Shah held that the respondent has benefited from the additional ITC to the extent of 5.77% of the turnover during the period July,2017 to March,2019 and hence the provisions of Section 171 of the CGST Act,2017 have been contravened by the Respondent as he has not passed on the benefit of ITC to his customers. Thus the profiteered amount is determined as Rs 19.72 Crores inclusive of GST @ 12% in terms of Rule 133(1) of the CGST Rules,2017. The NAA directed the DGAP to ensure that the profiteered amount is passed on to all buyers.
The order of National Anti profiteering Authority can be downloaded from below:
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