Watchdog penalises builder for not passing GST benefit to homebuyers
In a first ever order against a real estate firm for failing to pass on the GST reduction benefits to homebuyers, the federal anti-profiteering watchdog has ordered Gurgaon-based Pyramid Infratech to refund over Rs 8.22 crore to 2,476 flat owners within the next three months with 18% interest. Passing the order on Tuesday, the National Anti-profiteering Authority (NAA) said it will also issue a notice asking the builder why penalty should not be imposed on it for the violation. It has directed the builder to refund or reduce the amount, for every buyer at the time of collecting the last instalment. The authority has also ordered Haryana’s tax commissioner to monitor the compliance and submit a report within four months. According to the order, 109 home buyers had filed a complaint of profiteering against the builder in two affordable housing projects — Urban Homes in Sector-70A and Urban Homes in Sector-86 — in Gurgaon. They had alleged that the builder had not passed on the benefit of lower tax arising out of availing of input tax credit (ITC) post roll out of the GST and hence was indulged in profiteering. Passing the order after an investigation by the Director General of Anti-Profiteering (DGAP), the authority said it as “absolutely clear” that excess ITC was available to Pyramid Infratech and it was required to be passed on to the buyers. “The Respondent (Pyramid Infratech) cannot appropriate this benefit as this is a concession given by the government from its own tax revenue to reduce the prices being charged by the builders from the vulnerable section of society which cannot afford high value apartments,” the order said.
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