Govt warns builders against price hike on under-construction flats
The central government is keeping a close tab on prices five months after the rollout of the Goods and Services Tax (GST) and has warned builders against arbitrary price hikes on under-construction flats, saying it will be considered “profiteering”.
Acting on complaints that people who had booked flats before July 1 — when GST was rolled out — are being charged higher tax on EMIs, the Central Board of Excise and Customs (CBEC) has said construction of flats ought to be cheaper under the new tax regime. Pointing out that full input credit available under GST would offset the 12 per cent tax, the CBEC has said the input taxes embedded in the flat will not and should not form a part of the cost of the flat.
“Despite this clarity on law position, if any builder resorts to such practice, the same can be deemed to be profiteering under section 171 of GST law,” it has said.
The newly set up National Anti Profiteering Authority is empowered to not only penalise the erring company and order a refund of the additional amount, but also cancel its licence.