NAA: Penalty on Prestige Estates for Not Giving GST ITC to Homeowners

The National Anti- Profiteering Authority Prestige Estates revealed guilty of not giving the right amount of ITC to home buyers and levy a penalty under section 171 (3A) of the CGST Act, 2017.

Alleging, ITC availability after GST and the information of the amount collected from the home buyers by the respondent in the duration of 01.07.2017 to 30.09.2019, to the recipients, the amount of advantage of ITC was not get passed in which the profiteered amount arrives to Rs. 7,90,95,475 towards 452 homebuyers.

Respondent, already furnished a substantial amount of GST ITC under the requirements of Section 171 of the CGST Act, 2017 to the homebuyers and indeed gave excess GST ITC advantage to his buyers. The Respondent has not given proportional benefits to all homebuyers which were acknowledged by the Authority, DGAP revealed.

The benefit of the ITC under Section 171 of the CGST Act, 2017 is obligated to get furnished to every supply in an equivalent way. The excess ITC advantage furnished to some of the customers would not offset with respect to whom less ITC advantage has been given or no advantage would be furnished.

DGAP incurred all the efforts for the verification as per Order No. 01/2021 on 16.032021 of the Authority, however, the Respondent was not able to furnish the proof which was rendered in the Order and ended that the Respondent has profiteered such amount of Rs. 7,90,95,475.

The authority, under Rule 133(3)(a) of the Central GST Rules, the respondent will diminish the cost to be given through the buyers of the Flats/customers proportional to the advantage of ITC obtained through him.

The Coram, of Sh. Amand Shah, Chairman & Technical Member, Sh. Pramod Kumar Singh, Technical Member, and Sh. Hitesh Shah, Technical Member rendered that “the profiteered amount as determined shall be passed on/returned by the Respondent to the recipients of supply along with interest @18%, as prescribed under Rule 133(3)(b) of the CGST Rules, 2017, from the date such amount was profiteered by the Respondent up till the date such amount was passed on/returned to the respective recipient of the supply (if not already passed on) within a period of three months from the date of this order.”