2024 (2) TMI 412 - CCI - GST

Profiteering - residential flats and commercial shops - requirement to pass benefit of ITC on to the home/shop buyers or not - Section 171 of CGST Act - HELD THAT - The Commission finds that in respect of the project Devaan ITC as percentage of turnover that was available to the Respondent during the pre-GST period (April, 2016 to June, 2017) was 1.13% and during the GST period 01.07.2019 to 06.03.2020 it was 0.31%. It clearly confirms that the Respondent has not profiteered through additional Input Tax Credit in respect of project Devaan post-GST. Therefore, the Respondent is not required to pass on the benefit of ITC to his home/shop buyers for the period 01.07.2019 to 06.03.2020. The instant case does not fall under the ambit of Anti-Profiteering provisions of Section 171 of the CGST Act, 2017. Accordingly, the proceedings initiated against the Respondent under Rule 133 (4) of the CGST Rules, 2017 are hereby dropped.

Summary

Issues:
The judgment involves the determination of profiteered amount, investigation of input tax credit benefit, and compliance with Section 171 of the CGST Act, 2017.

Determination of Profiteered Amount:
The National Anti-Profiteering Authority (NAA) directed the Director General of Anti-Profiteering (DGAP) to further investigate the quantum of ITC benefit to be passed on to home/shop buyers. The investigation covered the period from 01.07.2019 to 06.03.2020, post-Completion Certificate issuance.

Investigation of Input Tax Credit Benefit:
The DGAP investigated whether the Respondent availed input tax credit on Construction Service supply and passed on the benefit to recipients as per Section 171 of the CGST Act, 2017. The Respondent's eligibility for ITC of VAT paid on inputs was examined based on submitted documents.

Compliance with Section 171 of CGST Act, 2017:
The computation of profiteering for the period from 01.07.2019 to 06.03.2020 was undertaken based on data submitted by the Respondent. The ratio of ITC to turnover pre-GST and post-GST periods was compared to determine if the Respondent profiteered through additional ITC.

Conclusion:
The Respondent's ITC as a percentage of turnover decreased from 1.13% to 0.31% post-GST, indicating no additional benefit from ITC. Consequently, the Respondent did not contravene Section 171 of the CGST Act, 2017, and the proceedings initiated against the Respondent were dropped. The judgment was communicated to all parties involved, and the case file was closed upon completion.