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2023 (8) TMI 233 - CCI - GSTScope of Section 171 of the CGST Act, 2017 - Profiteering - projects other than the project Panchshil Tower being constructed by the Respondent - reduction in rate of tax on any supply of goods or services or the benefit of ITC passed on to the recipient by way of commensurate reduction in prices or not. Yoovilla Phase-I project - HELD THAT - In respect of Yoovilla Phase-I project, the Respondent has submitted OC dated 01.07.2016 issued by the Pune Metropolitan Region Development Authority for building no. Villas of V-2 type, Ground floor and First floor for 6 no. of Villas and building no. Villas V-3 type, Ground floor and First floor for 39 no. of Villas, constructed in Phase-I and the said project was completed on 01.07.2016 in pre-GST period. Keeping in view the above submissions, the Commission finds that since the Respondent has received the OC on 01.07.2016 in pre-GST regime, Anti-profiteering provisions under Section 171 of CGST Act, 2017 are not applicable to the said Project. Project T-Villa'' - HELD THAT - The Commission has observed that the said project has been registered under RERA Reg. No. P52100010632 which is valid for a period commencing from 31.08.2017 and ending with 30.09.2023 unless renewed by MRERA. The same has been verified by the DGAP by visiting the website of MRERA. As per RERA Registration the Respondent has constructed four apartments in the said project and all the four apartments are unsold. Therefore, the Anti-profiteering provisions under Section 171 of CGST Act, 2017 are not applicable to the project. Project SOHO - HELD THAT - The Commission has found that the said project has been registered under RERA Reg. No. P52100017890 which is valid for a period commencing from 24.09.2018 and ending with 30.12.2026 unless renewed by MRERA. The same has been verified by the DGAP by visiting the website of MRERA. It is also observed that there is no unit sold in pre-GST era which can be compared with the post GST base price to determine whether there is any profiteering. There is also no availability of CENVAT to compare it with ITC which is available to him in post GST era. Therefore, Anti-profiteering provisions under Section 171 of CGST Act, 2017 are not applicable to the project. Project V2 Villa P-I - HELD THAT - The Commission has observed that the said project has been registered under RERA Reg. No. P52100034062 which is valid for a period commencing from 24.03.2022 and ending with 31.12.2027 unless renewed by MRERA. The same has been verified by the DGAP by visiting the website of MRERA. It is also observed that the said project was launched on 24.03.2022 and as per the Notification No. 03/2019-Central Tax (Rate) dated 29.03.2019, any project which was commenced after 01.04.2019 will be mandatorily required to follow the new GST rate of 5% (without ITC). Thus, the Respondent is not eligible to avail input tax credit w.e.f. 01.04.2019. Therefore, Anti-profiteering provisions under Section 171 of CGST Act, 2017 are not applicable to the project. 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 (5) of the CGST Rules, 2017 are hereby dropped.
Issues Involved:
1. Determination of profiteering amount. 2. Applicability of anti-profiteering provisions to various projects. 3. Verification of project status and compliance with GST and RERA regulations. Summary: 1. Determination of Profiteering Amount: The Competition Commission of India (CCI) received a report from the Director General of Anti-Profiteering (DGAP) on 16.02.2023, which followed an investigation under Rule 133(5) of the Central Goods & Service Tax (CGST) Rules, 2017. The National Anti-Profiteering Authority (NAA) had previously determined an amount of Rs. 1,96,69,483/- as the benefit of Input Tax Credit (ITC) not passed on to recipients by the Respondent during the period from 01.07.2017 to 30.11.2020. 2. Applicability of Anti-Profiteering Provisions: The DGAP issued a notice to the Respondent to reply whether the benefit of ITC had been passed on to buyers in all other projects. The Respondent argued that the anti-profiteering provisions were not applicable to other projects as they were either sold post-receipt of Occupancy Certificate (OC) or commenced in the GST regime without transitioning from the erstwhile tax regime. The projects in question included Yoovilla Phase I, Tanti Villa, Yoovilla Phase II, and SOHO. 3. Verification of Project Status and Compliance: The DGAP verified the Respondent's claims regarding MRERA registration and project status. For Yoovilla Phase I, the project was completed in the pre-GST period, making anti-profiteering provisions inapplicable. For T-Villa, there were no sales during the investigation period, thus anti-profiteering provisions did not apply. For SOHO, the project commenced in the GST regime with no pre-GST sales, hence anti-profiteering provisions were also inapplicable. For V2 Villa P1, the project was launched after 01.04.2019 and followed the new GST rate structure of 5% without ITC, making anti-profiteering provisions inapplicable. Conclusion: The Commission concluded that Section 171(1) of the CGST Act, 2017, which requires passing on the benefit of ITC by way of commensurate reduction in prices, was not applicable in the present case. The proceedings initiated against the Respondent under Rule 133(5) of the CGST Rules, 2017 were thereby dropped. A copy of the order was supplied to all parties, and the case file was consigned after completion.
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