Maintaining Joint ITC Register Lands Up Builder in Wider Investigation Net

It is learnt recently that NAA has directed DGAP to further investigate profiteering against DLF Ltd (hereinafter referred to as ‘Company’ or ‘respondent’) on complaint by Flat owner (hereinafter referred to as ‘applicant’) alleging that he had purchased the flat when the Completion Certificate had already been received by the company and possession was already given to many residents. Since the sale of flats after issuance of Completion Certificate did not attract GST the Applicant had alleged that the Respondent had charged 18% GST on the Preferential Location Charges (PLC).

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The Respondent also has a single GST registration and is maintaining a joint ITC Register and is availing ITC on all the projects which he is executing from a common pool of ITC, to discharge his GST output liability on these projects through the combined GSTR-3B Returns.

Therefore, all the projects on which the Respondent is availing ITC from the common pool are required to be investigated to determine whether he has passed on the benefit of ITC to the buyers of each project, which are being executed by him.

The Authority headed by the Chairman Dr. B.N. Sharma noted that took suo moto cognizance, and directed the DGAP to conduct investigation in respect of the project and submit Report to this Authority for determination whether the Respondent is liable to pass on the benefit of ITC in respect of the above project to the buyers or not as per the provisions of Section 171 (1) of the above Act.

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Conclusion

No Doubt it is alarm bell for all the Developers who have Multiple Projects in One Registered Entity and maintaining Joint ITC Register.

Further, In my view even this order for Further Investigation for All Projects should be challenged by Developer on the several grounds.

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