2023 (8) TMI 234 - CCI - GST

Profiteering - projects other than the project VISHVVANATH SARATHYA being constructed by the Respondent under single GST Registration - whether the Respondent was liable to pass on the benefit of ITC in respect of all the other Projects/Blocks to the buyers, or not, as per the provisions of Section 171(1) of the CGST Act, 2017? Vishwanath Sopan - HELD THAT - In respect of this project, the Respondent has submitted building use permission dated 24.01.2017 issued by the Ahmedabad Urban Development Authority. Keeping in view the above submissions, the Commission finds that since the Respondent has received the BU permission on 24.01.2017 in pre-GST regime, the Anti-profiteering provisions under Section 171 of CGST Act, 2017 are not applicable to the said Project. Vishwanath Samam - HELD THAT - The Commission has observed that the said project commenced in 2019 after implementation of GST. As per the RERA Website of Gujarat, date of commencement of the Vishwanath Samam project was 05.04.2019 and as per Respondent's record first booking for the project was done on 20.07.2019. Since, no unit was sold in pre-GST era which can be compared with the post-GST base price to determine whether there is any profiteering and there is no availability of CENVAT credit to compare with ITC which is available to him in post-GST era, therefore, the 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.

Summary

Issues involved:
The judgment involves the investigation of profiteering in relation to projects under the Central Goods & Service Tax (CGST) Rules, 2017, specifically focusing on whether the benefit of Input Tax Credit (ITC) was passed on to buyers as per Section 171(1) of the CGST Act, 2017.

Summary of Judgment:

Investigation Initiated by DGAP:
The National Anti-Profiteering Authority directed the Director General of Anti-Profiteering (DGAP) to investigate profiteering in projects other than "VISHVVANATH SARATHYA" under the same GST Registration No. The DGAP conducted investigations in compliance with the NAA's directives and issued notices to the Respondent for information on projects executed under the same GST Registration No. The investigation period covered was from July 2017 to August 2022, with a deadline set for completion by February 28, 2023.

Submission of Details by Respondent:
The Respondent provided various data and documents related to projects, including details of projects, tax returns, credit ledgers, balance sheets, and project statuses. The Respondent detailed the commencement and completion dates of projects, emphasizing that certain projects were executed entirely in the pre-GST or post-GST era.

Conclusion of DGAP:
The DGAP concluded that the Respondent did not contravene Section 171(1) of the CGST Act, 2017, which requires passing on the benefit of ITC to recipients through price reductions.

Commission's Findings:
Upon reviewing the DGAP's report and documents, the Commission noted the execution of three projects by the Respondent. The Commission acknowledged the NAA's previous determination of profiteering in one project. Regarding the other projects, the Commission found that anti-profiteering provisions did not apply. For the project executed in the pre-GST era, and the project commenced after GST implementation with no pre-GST sales, the Commission deemed Section 171 inapplicable.

Decision of the Commission:
Based on the findings, the Commission determined that the case did not fall under the Anti-Profiteering provisions of Section 171 of the CGST Act, 2017. Consequently, the proceedings initiated against the Respondent were dropped. The order was to be provided to all parties involved, and the case file was to be closed after completion.