In what may be the first such case in the state, a developer has been found to be involved in profiteering and has been told to pay Rs 48 lakh to 202 homebuyers.
A complaint had been filed by a homebuyer. The resulting probe of the Directorate General of Anti-Profiteering revealed that an Ahmedabad company earned Rs 48 lakh by not passing the input credit tax to homebuyers. The case relates to a residential property called ‘Reflections’ on SG Highway.
The complaint was filed by Rachna Sharma, a resident of Chandkheda, who had booked a flat in the residential scheme of Pacifica Developers Pvt Ltd.
The Directorate General of Anti-Profiteering, Central Board of Indirect Taxes and Customs, in a recent report said that Section 171 of the Central Goods and Services Act, 2017, appears to have been contravened by Pacifica Developers.
The report states that the introduction of GST law brought benefits to the builder to the tune of 1.13% and this amount of differential tax rate benefit had to be passed on to the homebuyers. The order calculates the benefit not passed to be Rs 48 lakh.
The investigating team took into account GST, VAT and RERA documents before arriving at the conclusion.
Sharma booked the flat in 2012, when she was living in Muscat with her husband Sunil Agarwal.
The developer had promised to complete the construction and deliver the home keys to them in October 2014, according to Agarwal. “In February 2016, we stopped making further payments and sent a legal notice seeking compensation for the delay in giving the possession of the flat,” he said.
“GST law provides that any benefit accruing to the builder due to a change in GST rates shall be passed on to the homebuyers,” said advocate Vishal Dave who is appearing for the complainant.