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2023 (10) TMI 468 - CCI - GSTProfiteering - purchase of flat - Respondent had not passed on the benefit of ITC to him by way of commensurate reduction in prices after implementation of GST - violation of of Section 171 of the CGST Act, 2017 - HELD THAT - This Commission has carefully considered the Report dated 26.02.2021 furnished by the DGAP and the other material brought on record and it has been revealed that the Applicant No. 1 has received ITC benefit of Rs 8,608/- which is more than the additional ITC benefit of 0.24% of the taxable turnover - The Applicant No. 1 vide email dated 20.09.2023 in response to personal hearing notice dated 06.09.2023 has stated that from his side he has no comments. It is apparent from the above email that Applicant No. 1 does not want to pursue the matter further as he has already received the benefit of ITC from the Respondent as is also stated in the Report of the DGAP. It is also revealed that the Respondent has passed on an amount of Rs. 17,26,772/- to the 56 home buyers whereas he was required to pass on benefit of Rs. 1,03,143/- only. The instant case does not fall under the ambit of Anti-Profiteering provisions of Section 171 of the CGST Act, 2017 as the benefit of ITC has already been passed on to the Applicant No. 1 and other home buyers - the present proceedings launched under Section 171 of CGST Act, 2017 are not maintainable and are hereby dropped.
Issues Involved:
1. Whether there was a reduction in the rate of tax or benefit of ITC on the supply of construction service by the Respondent after the implementation of GST. 2. Whether the Respondent passed on such benefit to the recipients in terms of Section 171 of the CGST Act, 2017. Summary of Judgment: Issue 1: Reduction in Rate of Tax or Benefit of ITC Post-GST Implementation The investigation by the Director General of Anti Profiteering (DGAP) was initiated based on an application alleging that the Respondent did not pass on the benefit of Input Tax Credit (ITC) after the implementation of GST. The DGAP examined the phase-wise project registration details and limited its investigation to Tower-1 of the project "VTP Beaumonde." It was observed that the Respondent availed ITC of GST paid on all inputs and input services post-GST, whereas pre-GST, only Service Tax credit on input services was availed. The comparative ratios of ITC to turnover for pre-GST and post-GST periods were 2.14% and 2.38%, respectively, indicating an additional ITC benefit of 0.24% post-GST. Issue 2: Passing on the Benefit to Recipients The DGAP verified that the Respondent had a clear stipulation in post-GST contracts that ITC had already been factored into the transaction value. The Respondent also claimed to have passed on benefits of 4.5% to pre-GST home buyers and 7% to post-GST home buyers. The DGAP confirmed that the Respondent had passed on Rs. 17,26,772/- to 56 home buyers who booked flats in the pre-GST period, which was more than the required Rs. 1,03,143/-. Emails were sent to 56 home buyers to verify the claims, and 23 confirmed receipt of the benefit, including the Applicant No. 1, who acknowledged an ITC benefit of Rs. 8,608/-. The DGAP concluded that the Respondent had not contravened Section 171 of the CGST Act, 2017, as the benefit of ITC had been adequately passed on. The National Anti-Profiteering Authority (NAA) issued a notice to the Applicant No. 1, who did not pursue the matter further, confirming that he had received the ITC benefit. Final Decision: The Commission decided that the case does not fall under the ambit of Anti-Profiteering provisions of Section 171 of the CGST Act, 2017, as the benefit of ITC had been passed on to the Applicant No. 1 and other home buyers. Accordingly, the proceedings were not maintainable and were dropped.
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