Real Estate

NAA: Mahindra Lifespaces profiteered in Chennai project

Our Bureau New Delhi | Updated on July 20, 2020 Published on July 20, 2020

National Anti-profiteering Authority (NAA) has upheld profiteering allegation against Mahindra Lifespaces for its Chennai-based Avadi project.

The allegation is that developer did not pass on the ITC (Input Tax Credit) benefit to its flat buyers in the said project and profiteered an amount of approximately ₹2.87 crore. This matter was re-investigated by Director General of Anti Profiteering (DGAP) following which NAA gave a ruling.

It held that developer contravened provisions of GST Law as it did not reduce the basic prices by 7.06 per cent due to additional benefit of ITC. It stated, “There is correlation between the ITC and the turnover as the benefit is directly linked to both.” Accordingly, ratio of ITC to turnover is required to be computed for both pre-GST and post-GST period. Based on the records, the Authority remarked that as prices of flats were fixed by Respondent (Developer) in pre-GST era, it was bound to pass the ITC available in the post-GST period and reduce the prices commensurately.

NAA rejected Respondent’s plea that the calculation of benefit shall be made only for those flat buyers who had purchased before GST introduction as buyers of post GST era had already received rate reduction benefit.

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

Published on July 20, 2020
  1. Comments will be moderated by The Hindu Business Line editorial team.
  2. Comments that are abusive, personal, incendiary or irrelevant cannot be published.
  3. Please write complete sentences. Do not type comments in all capital letters, or in all lower case letters, or using abbreviated text. (example: u cannot substitute for you, d is not 'the', n is not 'and').
  4. We may remove hyperlinks within comments.
  5. Please use a genuine email ID and provide your name, to avoid rejection.