First time ever! Failed to pass GST benefits, real estate firm ordered to refund Rs 8.2 crore to flat owners : 20-09-2018

In a first, Gurugram-based Pyramid Infratech has been ordered by National Anti-Profiteering Authority (NAA) to refund more than Rs 8.22 crore to 2,476 flat owners for failing to pass on the benefit of GST reduction to them. The order was passed after 109 home buyers complained about profiteering in two affordable housing projects of Pyramid Infratech β€” Urban Homes, Sector 70A, Gurugram and Urban Homes, Sector-86, Gurugram.

NAA has directed the infratech firm to refund or reduce Rs 8.22 crore from last installment of buyers along with yearly interest of 18 percent that is to be calculated from the date of the receipt of the excess amount from each buyer, within a period of 3 months.

β€œIt is evident from the above that the Respondent (Pyramid Infratech) has denied benefit of ITC to the buyers of the flats being constructed by him in contravention of the provisions of Section 171(1) of the CGST Act, 2017 and has thus realized more price from them than he was entitled to collect and has also compelled them to pay more GST than that they were required to pay by issuing incorrect tax invoices and hence he has committed an offence under section 122 (1) (i) of the CGST Act, 2017 and therefore, he is liable for imposition of penalty,” the order said. The company, however, would be served a show cause notice to explain non-imposition of penalty.

The home buyers had complained that the firm indulged in profiteering as it had not passed on the benefit of lower tax arising out of availing of input tax credit (ITC) post roll out of the GST.

The company in its defense said that owing to an increase in the raw material cost and also rise in burden of taxes of sub-contractors, no GST benefit was passed on to the flat buyers.

The report submitted by the Directorate General of Anti-Profiteering (DGAP) to the National Anti Profiteering Authority (NAA) said that Pyramid Infratech has profiteered Rs 8,22,80,998 from the flat buyers.

 

Source : Economic Times

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