NAA To DGAP: Inquire Construction Service Under PMAY Scheme

NAA which stands for the National Anti-Profiteering Authority has recently directed DGAP to investigate profiteering allegations on the supply of construction services under Pradhan Mantri Aawas Yojna (PMAY).

The first applicant had filed a petition before the Standing Committee on Anti-profiteering stating that “the Respondent had resorted to profiteering in respect of the supply of construction service concerning the purchase of a house under the Pradhan Mantri Aawas Yojna (PMAY) in the Respondent’s project ‘Mayur Residency Extension’.

Applicant had also claimed that “the respondent had charged GST @ 18% on the construction service The Central Government might reduce the luxury tax slab of 28% on construction items ahead of the 2019 election. The move will be aimed to stimulate. Read More or works contract service and had not passed on the benefit of Input Tax Credit (ITC) to him by way of the corresponding reduction in the price of the house after implementation of the GST in terms of Section 171 of the CGST Act, 2017″.

The said application was reviewed by the Standing Committee on Anti-profiteering’s meeting held on 11.03.2019 and upon being prima facie satisfied that the Respondent had contravened the provision of Section 171 (1) of the CGST Act, 2017, it had delivered the same with its recommendation to the DGAP for a detailed investigation.

The order is pronounced by the Coram comprising of BN Sharma (Chairman) and two Technical Members JC. Chauhan and Amand Shah. The pronounced order is based on an application filed against M/S Manas Vihar Sahakari Awas Samiti Ltd.

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The Authority stated that the Respondent has refused the benefit of ITC to the buyers of the flats which are being constructed in his Project ‘Mayur Residency Extension’ by him in violation of the provisions of Section 171 (1) of the CGST Act, 2017 and he has thus apparently committed an offence.

As per the Authority, the respondent on his submissions has also acknowledged that there are four other projects he was executing viz. (i) Manas City Extension Phase-I, (ii) Manas Enclave Phase-II, (iii) Mayur Complex and (iv) Mayur Residential Complex as is evident from the inspection of Annexures C and Cl-C5. The respondent also admitted that he is eligible for the benefit of ITC on some of these projects either by way of reduction in the rate of construction or by way of refund through banking channels.

The NAA in this matter directs the DGAP to investigate the projects of the respondent, in terms of the provisions of Section 171 of the CGST Act, 2017 and to submit his report by considering the Rule 133 (5) (b) of the CGST Rules, 2017.