GST Update

 Desk of CA. Praveen Sharma – 972 Series (CAPS) 

GSTAT-DELHI (PB) IN THE CASE OF DG Anti Profiteering, Director General of Anti-Profiteering, DGAP

A complaint was filed against a real estate developer alleging that the benefit of increased input tax credit was not passed on to homebuyers through reduced prices in a housing project. An investigation was conducted, which found that the developer had received higher tax credit benefits after the introduction of GST.

Based on the analysis, it was observed that the developer gained additional financial benefit due to increased input tax credit. This benefit should have been passed on to buyers by reducing the prices of flats. However, a portion of this benefit was not passed on, resulting in excess collection from buyers.

The total amount of undue benefit was calculated, out of which a major portion had already been refunded by the developer. The remaining amount was also accepted by the developer, and proof of payments made to customers was submitted.

The authority examined all records, financial statements, and submissions. Since the developer had accepted the findings and refunded the amount to buyers, no penalty was imposed.

However, it was held that interest is payable on the amount retained by the developer, as it represents excess money collected from buyers. Interest is considered compensatory in nature and is payable for the period during which the benefit was not passed on.

Accordingly, the developer was directed to pay the remaining amount along with interest to the eligible homebuyers within a specified time and submit proof of compliance to the authorities.

LINK:CA. Praveen Sharma on Linkedin

Regards
CAPS