Gaursons Realtech guilty of profiteering Rs 19 cr: GST NAA

While upholding the profiteering amount, National Anti Profiteering Authority (NAA) also asked DGAP to investigate 33 other projects of Gaursons Realtech to check whether the benefits of lower taxes paid on raw material used in construction were passed on to flat buyers. Based on the application that the realty company had resorted to profiteering when it sold flat in its '16th Park View' project on Yamuna Expressway (Greater Noida), the Directorate General of Anti Profiteering (DGAP) investigated the case.

The GST anti profiteering authority has found Ghaziabad-based Gaursons Realtech guilty of not passing on lower tax rate benefits worth Rs 19.72 crore to homebuyers. While upholding the profiteering amount, National Anti Profiteering Authority (NAA) also asked DGAP to investigate 33 other projects of Gaursons Realtech to check whether the benefits of lower taxes paid on raw material used in construction were passed on to flat buyers.

Based on the application that the realty company had resorted to profiteering when it sold flat in its '16th Park View' project on Yamuna Expressway (Greater Noida), the Directorate General of Anti Profiteering (DGAP) investigated the case. The applicant had alleged that Gaursons Realtech had charged 12 per cent GST from him on the consideration paid by him before Goods and Services Tax was rolled out on July 1, 2017. The applicant had alleged that he had paid the full amount for the flat on or before June 30,2017. However, the realty company raised the demand for payment of 12 per cent GST on the amount paid prior to the rollout of the new indirect tax regime and raised the cost of the flat from Rs 28.78 lakh to Rs 30.62 lakh.

The DGAP in its report found that the company has not passed on input tax credit (ITC) benefit to the tune of Rs 19,72,09,203 by not reducing the base price by 5.77 per cent in case of 2,349 homebuyers. Gaursons Realtech has also claimed that it has passed on the benefit of Rs 28,22,65,749 to 908 home buyers.

National Anti Profiteering Authority (NAA) in its order said that Gaursons Realtech has benefitted from the additional ITC to the extent of 5.77 per cent of turnover during July 2017-March 2019 and has not passed on the benefit to the buyers. "Thus, the profiteering amount is determined as Rs 19,72,09,203," NAA said.

The authority asked Gaursons Realtech to pass on the balance benefit of ITC of over Rs 1.04 crore in case of 908 flat buyers, which the company had not passed on already, along with 18 per cent interest. It also directed the realty company to reduce the price to be realised from flat buyers and asked DGAP to investigate the amount of benefit, which needs to be passed on from April 1, 2019 till June 30,2020.

NAA asked DGAP to investigate 33 other projects of Gaursons Realtech to see whether the benefit of ITC was passed on to buyers in these projects. PTI JD BAL.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)