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2022 (8) TMI 43 - NAPA - GSTProfiteering - purchase of flat - allegation is that the benefit of GST not passed on by way of commensurate reduction in the price - contravention of section 171 of GST Act - HELD THAT - As per the findings, the Authority determines the amount profiteered by the Respondent No. 1, during the period 1.07.2017 to 30.12.2019, as Rs, 67,18,426/- and the Respondent No. 2 as Rs. 4,59,286/-. The Authority takes cognizance, based on the DGAP s verification, that the Respondent No. 1 has passed on benefit as per Table M above by credit notes/ on tax invoices of the amount profiteered by him. The Authority takes cognizance, based on the DGAP s verification, that the Respondent No. 2 has passed on benefit as per Table-N above by credit notes of the amount profiteered by him. The Authority directs the Respondent No. 2 to pass on the benefit of Rs. 3,61,621/-along with interest as prescribed under Rule 133 (3)(b) of the CGST Rules, 2017. The details of the homebuyers to whom the profiteered amount was required to be passed on by the Respondent No. 1 and Respondent No. 2 along with the details of such amounts claimed to be passed on by the said Respondents (and so verified by the DGAP) is attached herewith as Annexure A to this order. The details of the four homebuyers to whom profiteered amount is required to be passed on by the Respondent No. 2 along with details of such amounts (as reported by the DGAP) are attached herewith as Annexure B to this order. Levy of Interest - HELD THAT - The Authority finds that, the Applicant No. 1 has made a claim to interest on the amount of benefit of ITC accruing to him. It is his submission that, any return of benefit, by whatever means, must be along with interest due. The Authority finds that, as per the provision of Section 171 of the CGST Act, 2017 and Rule 133 of the CGST Rules, 2017, it is incumbent on the registered supplier to commensurately reduce the price of his supply to the recipient as soon as there is a reduction in the rate of tax or availability of ITC. Hence, in the present case too, it was incumbent on the Respondents to have complied with such mandate of the law. In case of non-compliance, there would be contravention of the provisions of Section 171 (1) of the CGST Act, 2017. Hence, The Authority directs that, Respondent No. 1 and Respondent No. 2 shall comply with the said provisions and mandate of law. The Authority directs that Respondent No. 1 and Respondent no. 2 shall pay interest @ 18% per annum on the additional amounts collected from each recipient of supply. from the date such amounts were collected by them upto the actual date of passing on/ return of such amount to each recipient as prescribed by Rule 133(3)(b) of the CGST Rues, 2017. This Order having been passed today falls within the limitation prescribed under Rule 1.33(1) of the CGST Rules, 2017.
Issues Involved:
1. Whether the benefit of Input Tax Credit (ITC) was passed on to the customers. 2. Calculation discrepancies in ITC figures. 3. Incorrect assumptions regarding ITC for different towers. 4. Reversal of credit for units with Occupancy Certificate (OC). Issue-wise Analysis: 1. Benefit of ITC Passing: The Respondent No. 1 was required to pass on the benefit of ITC to the customers of the project "Godrej Summit" as per the anti-profiteering provisions under Section 171 of the CGST Act, 2017. The DGAP's re-investigation revealed that the ITC as a percentage of turnover increased from 3.70% in the pre-GST period to 5.25% in the post-GST period, indicating an additional benefit of 1.55% that needed to be passed on. The Respondent No. 1 claimed to have passed on the benefit of Rs. 1,17,37,843/- through credit notes and tax invoices, which was verified by the DGAP. However, the Respondent No. 2 was found to have passed on only Rs. 97,665/- out of the required Rs. 4,59,286/-, leaving a shortfall of Rs. 3,61,621/-. 2. Calculation Discrepancies in ITC Figures: The Respondent No. 1 claimed discrepancies between the ITC figures reported by the DGAP and those in GSTR-3B returns. The DGAP verified and rectified the difference of Rs. 2,09,28,765/- due to ITC reversal reported in March 2018, which was corrected in the Annual Return GSTR-9 for FY 2017-18. 3. Incorrect Assumptions Regarding ITC for Different Towers: The DGAP's initial report was based on the assumption that ITC for April 2016 to June 2017 pertained to 11 towers, while ITC for July 2017 to August 2018 pertained only to Towers A and L. Upon re-investigation, the DGAP considered the revised information provided by the Respondent No. 1 and recalculated the profiteering amount accordingly. 4. Reversal of Credit for Units with OC: The DGAP examined the reversal of credit for unsold units at the time of receipt of OC and found it to be correct. The investigation period was extended to 30.11.2019 to include the reversal of ITC post-OC receipt on 26.12.2018. The DGAP confirmed that the Respondent No. 1 had reversed ITC for unsold units and recomputed the profiteering amount. Final Judgment: The Authority found that the Respondent No. 1 had passed on the benefit of ITC as claimed, and Section 171 of the CGST Act, 2017, is not invoked against him. However, the Respondent No. 2 is directed to pass on the remaining benefit of Rs. 3,61,621/- along with interest. The Authority also directed the Respondents to pay interest on the additional amounts collected from each recipient from the date of collection until the actual date of passing on the benefit. Compliance with these directions is to be monitored by the Commissioners of CGST/SGST Haryana under the supervision of the DGAP.
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