Mumbai: The government
claimed by some real estate developers to practice in the court of the National Anti-Profiteering Authority (NAA) of constitutional validity and
claimed that the body does not have the authority to engage on punitive
penalties for it.
This happens after the NAA
slapped notifications on 50 real estate developers beyond India to benefit from
the Goods and Services Tax (GST).
According to a warrant appeal registered in the Delhi High Court, the NAA is on
a standard with a tax bench, but it is not actually a judicial member as a part
of it.
Through the GST framework, the
benefits of rate reduction have to be passed on to customers. If a firm is
inadequate to do so, it can be fined and invested for profiteering from tax
management. Split with anti-profiteering requirements in the GST Act: “A
reduction in the price of tax on any supply of property or assistance or input
tax credit shall be passed on to the beneficiary (consumer)." This same
reduction in prices.
Input tax credit applies to a
mechanism supporting the GST framework, in which the company when purchasing
funds when it purchases raw materials or any other charges can be levied on the
buyer when marketing assets or services is done.
Many real estate developers based
in Mumbai, Chennai, Delhi and Bengaluru had to pay fines as they did not run on
the benefits of input tax credit to customers.
According to inquiries by the
NAA, developers are not spending on the advantages of input tax credit to
customers. Real estate developers are investigating the NAA's jurisdiction to
raise concerns over fines.
Khaitan & Co. partner
Abhishek A. Rastogi said, "What is of concern is that the legal
requirements (section 171) do not exist for interest," it said.
This is when the vested tax
department initiated the developers' investigation on the development credit to
which they were entitled. Real estate professionals had initiated taxes paid
under the pre-tax regime on their GST responsibilities and the tax department
directed them to change their activities.Many real estate developers had
sought transaction credits on under-construction flats and were entitled to
property or inventory for these, but the tax department denied the allegations
by sending notifications. Taxes for some of the best players are in the
hundreds of crores.
The NAA has also examined some
additional divisions, such as FMCG and Pharma, for profiting from GST rate cuts
in the past. The NAA investigated tax administrators and CFOs of about 150
Buyer Goods and Pharma Corporation to find that their stock was sold at low
rates after the GST rollout on June 30, 2017, with publishers and stockists.
Some organizations also engaged
the government and the complex tax department above GST on these occasions
which could put long-term land lease agreements at risk.
