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Respondent has denied benefit of ITC to the buyers of the flats being constructed by him in his “Oyster Grande” project in contravention of the provisions of Section 171 (1) of the CGST Act, 2017

Anti-Profiteering — Section 171 of the CGST Act, 2017— The applicant complained profiteering by the Respondent in respect Flat in the Respondent’s project “Oyster Grande” situated in Sector-102/102A, Gurugram, Haryana. The Applicant alleged that the Respondent had not passed on the benefit of ITC to him by way of commensurate reduction in the price. This Complaint was examined by the Haryana State Screening Committee and it was observed that due to availability of ITC on input materials, the Respondent’s tax burden had been reduced which needed to be passed on to the customers, in terms of Section 171 of the Act. The DGAP after investigation concluded that the Respondent had been benefited with additional ITC and the same was required to be passed on to the Applicant and the other recipients. Further, the provisions of Section 171(1) of the Act requiring that “any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices”, have been contravened by the Respondent.
Held that:- The Hon’ble Anti-Profiteering Authority held that the Respondent has denied benefit of ITC to the buyers of the flats in contravention of the provisions of Section 171 (1) and has thus resorted to profiteering. Hence, he has committed an offence under Section 171 (3A) and therefore, liable for imposition of penalty.—Amit Tandon Vs Adani M2k Projects LLP [2019] 19 TAXLOK.COM 130 (NAPA)