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ACTION AGAINST GURGAON BUILDERS FOR NOT PASSING ON GST BENEFIT TO HOMEBUYERS




The GST Act mandates the builders to pass on GST benefits to the buyers paying GST on purchase of property. While the overall cost of construction seems to have gone down under the GST regime on account of additional input tax credit for builders, the intent to pass on the benefit of lower cost to the property buyer still seems to be missing from the market.

In order to ensure that homebuyers get this benefit, the government has started questioning developers/builders who are not passing on the reduced rates and additional input tax credit (ITC). The National Anti-Profiteering Authority (NAPA) has imposed a penalty on a Gurgaon-based real estate developer Pyramid Infratech for not passing on the benefits under the Goods and Services Tax (GST) regime. The builder was asked by the Authority to refund within 3 months over Rs 8.22 crore to about 2,476 buyers with an additional 18 % interest.

The Directorate General of Anti-Profiteering (DGAP) is investigating over 50 property developers for not passing the Goods and Services Tax (GST) benefits to end consumers. These developers include some of India's top builders who are facing probe for profiteering under the GST regime.

The DGAP is trying to ascertain if the real-estate developers made excessive profits by not passing on the benefits of input tax credit available to them to the end consumers.

The anti-profiteering body has by far probed about 125 cases and discovered that 60% of them had indulged in anti - profiteering.


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Comments

  1. Unknown14 May 2019 at 08:55

    Good Posting. Such small write up on critical issues surrounding real estate sector would help the readers and prospective investors.

    ReplyDelete
  2. Kumar14 May 2019 at 10:35

    Good to note this. Many would not be aware of it. Thanks for raising the awareness.

    ReplyDelete

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