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Builder found guilty of denying benefit of ITC to buyers of flats.

Anti-Profiteering — Applicant No.1 had filed application dated 05.09.2018 (Annexure-1) before the Standing Committee on Anti-profiteering stating that the Respondent had resorted to profiteering in respect of supply of construction service related to the purchase of a house under the Pradhan Mantri Aawas Yojna (PMAY) in the Respondent’s project “Mayur Residency Extension”. He had also alleged that the Respondent had charged GST @ 18% on the construction service/ works contract service and had not passed on the benefit of input Tax Credit (ITC) to him by way of commensurate reduction in the price of the house after implementation of the GST w.e.f. 01.07.2017, in terms of Section 171 of the CGST Act, 2017.
The Respondent has denied benefit of ITC to the buyers of the flats being constructed by him in his Project ‘Mayur Residency Extension’ in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and he has thus apparently committed an offence under Section 171 (3A) of the above Act and therefore, he is liable for imposition of penalty under the provisions of the above Section. Accordingly, a notice be issued to him directing him to explain as to why the penalty prescribed under Section 171 (3A) of the above Act read with Rule 133 (3) (d) of the CGST Rules, 2017 should not be imposed on him. — Deepak Kumar Barnwal, Director General of Anti-Profiteering, Indirect Taxes & Customs Vs. Manas Vihar Sahakari Awas Samiti Ltd. [2020] 21 TAXLOK.COM 079 (NAPA)