A day after the Delhi High Court stayed an order by the National Anti-Profiteering Authority (NAA) against the Haryana-based real-estate company Pyramid Infratech, the industry sees it as a relief for realty players struggling for answers on how much GST benefits have to be passed on to the buyers.
On September 19, the NAA had asked Pyramid Infratech to return a profit of over ₹8.22 crore made by not passing on the benefits of input tax credit (ITC) to nearly 2,500 home buyers.
“The interim relief has removed the controversy over not only the appeal provisions and jurisdiction but also a mechanism which needs to be consistently followed by the authorities,” said Abhishek A Rastogi, Partner, Khaitan and Co.
The methodology to determine the quantum of profiteering has been the subject matter of dispute and the ratios used by the authority in this case was highlighted before the Delhi High Court, he added. “The High Court broadly and prima facie felt that the mechanism used is wrong,” said Rastogi.
Two projects
Over 100 buyers of the company’s two projects — Urban Homes in Sector 70A and Urban Homes in Sector 86 in Gurugram — approached the Haryana Screening Committee (the contact point for the NAA in a State) with complaints that the realtor was not giving them the benefits of ITC.
The next hearing of the case is on February 19, 2019.