GST: Where respondent builder denied benefit of ITC to buyers of flats being constructed by him in its project 'Sky Terraces' in contravention of provisions of section 171(1), he shall be liable for imposition of penalty under section 171(3A)
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Jai Prakash Gargv Vs.Adarshdarshdarshdarsh Thought Works (P.) Ltd.
Section 171 of the Central Goods and Services Tax Act, 2017, read with rule 133 of the Central Goods and Services Tax Rules, 2017 - Anti-profiteering measure - Applicant No. 1 buyer alleged profiteering by respondent builder in respect of purchase of flat in project 'Sky Terraces' of respondent situated at Rajasthan - Applicant alleged that respondent had not passed on benefit of ITC by way of commensurate reduction in price of flat on implementation of GST with effect from 1-7-2017 - DGAP on investigation concluded that ITC as a percentage of turnover that was available to respondent during pre-GST period was 1.41 per cent and during post-GST period it was 6.79 per cent which showed that post-GST respondent had benefited from additional ITC to extent of 5.38 per cent of taxable turnover which should have resulted in commensurate reduction in base prices as well as cum-tax prices of flats, benefit of which was required to be passed on to flat buyers by respondent - Whether therefore, respondent having denied benefit of ITC to buyers of flats in his project 'Sky Terraces' in contravention of section 171(1), he shall be liable for imposition of penalty under section 171(3A) read with rule 133(3)(d)
Held, yes[Paras 23 and 30]
Circulars and Notifications: Notification No. 55/2020-Central Tax dated 27-6-2020
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