Jainil Jayeshbhai Mehta Vs Swastik Harmony Developers (Competition Commission of India)
The Competition Commission of India (CCI) has dismissed allegations of anti-profiteering against Swastik Harmony Developers raised by Jainil Jayeshbhai Mehta. Mehta claimed that the developer failed to pass on the benefits of the Goods and Services Tax (GST) rate reduction and Input Tax Credit (ITC) for his purchased flat in the “Swastik Heights” project, Ahmedabad. The Director-General of Anti-Profiteering (DGAP) investigated and found that the project began post-GST implementation, with no pre-GST turnover or ITC that could be compared to post-GST figures. The investigation revealed that the developer charged an 8% GST rate with ITC instead of the reduced 1% without ITC, but this was within the legal option provided to them. The DGAP concluded that there was no requirement for the developer to reduce prices further. Consequently, the CCI ruled that Section 171(1) of the CGST Act, which mandates the passing of tax rate reductions or ITC benefits to consumers, was not applicable in this case. The proceedings were dropped, with no action required against the developer.
FULL TEXT OF THE ORDER OF COMPETITION COMMISSION OF INDIA
1. The present Report dated 10.08.2023 has been received from the Director-General of Anti-Profiteering (DGAP) after a detailed investigation under Rule 129 of the Central Goods & Service Tax (CGST) Rules, 2017 on an application filed by Applicant No. 1 under Rule 128 of the CGST Rules, 2017 wherein he had alleged that the Respondent had not passed on the benefit of reduction in rate of tax or input tax credit (ITC) to him by way of commensurate reduction in the price of the Flat No. 601 purchased from the Respondent in his project “Swastik Heights”, situated at Ahmedabad, Gujarat in terms of Section 171 of the CGST Act, 2017. He also alleged that the Respondent had not passed on any benefit of ITC till date which was already received by him. He charged GST @ 8% on the base price of 25,00,000/- for the flat and promised to pass on the benefit of ITC at the same time of booking flat in Swastik Heights on 28.02.2019 but after he had received ITC he denied to pass on any benefit to the owner of flat. Respondent had opted to charge GST @8% from all the owners of the flats with benefit of ITC instead of opting for reduced new GST rate of 1% without ITC w.e.f. 01.04.2019.
