GST Watchdog Strikes Back: This Gurgaon Firm Ordered To Refund Rs 8 Crore Of GST Benefits!
This is for the first time that a company has been ordered to refund GST benefits.
National Anti-Profiteering Authority was established last year to ensure that GST benefits were passed on to the customers.
We had reported that National Anti-Profiteering Authority has been empowered with special laws and regulations, and has the power to even shut down a business if GST benefits are not passed on.
Big multinational companies were warned, and alerted about GST laws, and how they can be fined if they break the laws.
Now, for the first time ever, a Gurgaon based firm has been ordered under the laws of National Anti-Profiteering Authority to refund Rs 8.2 crore, back to customers.
Which company is this? And what is the case?
Keep reading to find out.
This Gurgaon Company Will Refund Rs 8.2 Cr of GST Benefits!
For the first time ever a company has been ordered to refund GST benefits.
Gurgaon based Pyramid Infratech has been ordered by The National Anti-profiteering Authority (NAA) to immediately refund back GST benefits worth Rs 8.22 crore to 2476 flat owners, who had purchased properties from them.
The order has started that the refund should be completed in 3 months, and 18% interest has to be paid over the due amounts.
As per the order, the company: Pyramid Infratech can either refund the money back to the consumers, or deduct the same amount from their last installment.
Besides, Haryana’s tax commissioner has been ordered to monitor the refund process, and submit a report in 4 months.
What Is The Actual Case?
The refund order initiated by the anti-profiteering watchdog is a real victory of consumer rights.
109 home buyers at Urban Homes in Sector-70A and Urban Homes in Sector-86 Gurgaon filed a complaint to GST officials about Pyramid Infratech’s reluctance to give GST benefits.
As per the complaint, Pyramid Infratech failed to pass on the lower tax benefits arising from Input Tax Credit.
Anti-profiteering authority in their order stated, “The Respondent (Pyramid Infratech) cannot appropriate this benefit as this is a concession given by the government from its own tax revenue to reduce the prices being charged by the builders from the vulnerable section of society which cannot afford high-value apartments,”
In their defense, the concerned company: Pyramid Infratech has claimed that due to rising cost of raw materials, and expensive sub-contractors, they are not able to pass on the GST benefits back to the consumers.
NAA has specifically stated that they are not asking the company to pay GST benefits from their own pockets, but to release the funds which they ‘earned’ due to benefits from input tax credits.
Implications Of This Ruling?
This may set a ripple effect all over the nation, as cases of companies failing to pass on GST benefits is rising.
As we reported last year, GST is being exploited, and as per a survey, 77% of consumers were forced to pay GST over MRP, which is not allowed.
Investigations are currently on against big MNCs such as Pizza Hut, Subway, KFC, McDonald’s, Lifestyle International and more. Infact, there has been 1500% increase in ecommerce complaints, and majority of them are believed to be tax related.
We will keep you updated, as we receive more information on this matter.