GST: NAA orders Suncity Project to pass on ITC benefits along with Interest to its Homebuyers [Read Order]

The National Anti-Profiteering Authority (NAA) ordered the M/s Suncity Project to pass on Input Tax Credit (ITC) benefits along with interest to its homebuyers.

The Applicant filed the application before the Standing Committee on Anti-profiteering, stating therein that he had purchased a flat in the project “Suncity Avenue-102”, Sector-102, Gurgaon, Haryana from the Respondent, M/s Suncity Project and that the Respondent had not passed on the benefit of input tax credit to him by way of commensurate reduction in price in terms of Section 171 of the CGST Act, 2017.

The profiteering watchdog, NAA noted that it is revealed from the submissions of the Respondent that he has not passed on interest at the rate of 18% on the profiteered amount to his years, including Applicant and the 20 homebuyers who are yet to receive the commensurate benefit.

Hence, the Authority headed by Chairman Dr. B.N. Shrama in line with the provisions of Section 171 (1) of the CGST Act, 2017 read with Rule 133 (3) (b) of the CGST Rules, 2017, ordered that the applicable interest shall be paid by the Respondent to his homebuyers from the date of receipt of the additional amount of consideration in the hands of the Respondent till the amount is paid to each buyer, as the Respondent has used this amount in his business.

The NAA directed the DGAP to ensure that the interest, at the applicable rate, is paid to the eligible home buyers and submit his report confirming payment of the interest within three months of this Order. In case the interest is not paid the same shall be recovered by the concerned CGST or SGST Commissioner and paid to the eligible buyers.

The NAA noted that only 736 of the 761 residential units had been sold and none of the shops in the commercial complex had been sold during the period of investigation.

The NAA observed that the present investigation of the DGAP was only up to June 30, 2019. Hence, any additional benefit of ITC, which shall accrue subsequently to the respondent, shall also be passed on to the eligible homebuyers by the Respondent Further, the total additional ITC that will be finally available to the Respondent cannot be determined at this stage since the construction of the project is yet to be completed.

Therefore, the court held that the DGAP shall carry out a comprehensive investigation of the said project of the Respondent from the perspective of Section 171 of the CGST Act 2017 at the time of issue of occupancy certificate.