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2023 (12) TMI 149 - CCI - GSTProfiteering - purchase of Flat - benefit of reduction in the rate of GST not passed on - contravention of provisions of section 171 of CGST Act - HELD THAT - The Commission finds that if the amount of ITC availed/available to the Respondent in post-GST regime is considered up to 16.07.2017, then it would be very meagre amount of ITC (01.07.2017 to 16.07.2017) and huge amount of ITC available to the Respondent in post GST-regime (17.07.2017 to 31.07.2019) would escape from the computation of profiteered amount which would be incorrect and leaving such ITC would not serve the purpose of Section 171 of the CGST Act, 2017. Hence, in terms of Section 171 of the CGST Act, 2017, the ITC has been rightly taken for the period from 01.07.2017 to 31.07.2019. Thus, the amount of ITC and investigation period considered by the DGAP from 01.07.2017 to 31.0.2019 for the purpose of calculation of profiteering is correct. The Commission observes that the instant case does not fall under the ambit of Anti-Profiteering provisions of Section 171 of the CGST Act, 2017 as the Respondent has neither been benefited from additional ITC nor there has been a reduction in the tax rate in the post-GST period - the application filed by the Applicant No. 1 requesting action against the Respondent for charging GST @ 18% on PLC is not maintainable and hence the same is dismissed.
Issues involved:
The issues involved in this case are related to alleged profiteering by the Respondent in the purchase of a flat, computation of Input Tax Credit (ITC) pre and post-GST, discrepancies in the investigation period, and charging of GST on Preferential Location Charges (PLC). Alleged Profiteering by Respondent: The Applicant filed a complaint alleging profiteering by the Respondent in the purchase of a flat in a specific project. The DGAP's report indicated that post-GST, the Respondent did not benefit from additional ITC, with ITC availed being lower by 0.71% compared to the pre-GST period. The investigation period covered from 01.07.2017 to 31.07.2019, and it was found that no additional benefit of ITC was derived post-GST implementation. Discrepancies in Investigation Period: The erstwhile NAA observed discrepancies in the investigation period specified by the DGAP's report. It was noted that the investigation should have been restricted up to 16.07.2017, the date of receipt of the Completion Certificate, instead of extending it up to 31.07.2019. However, the DGAP justified the extended investigation period to ensure the correct computation of ITC and compliance with Section 171 of the CGST Act, 2017. Charging of GST on Preferential Location Charges (PLC): The Applicant raised concerns about the Respondent charging GST at 18% on PLC. The Respondent provided a CA Certificate showing the breakdown of the amount received from the Applicant, confirming that GST was collected only on PLC. The Commission clarified that the issue of charging GST on PLC falls outside its purview, as its mandate is to examine the passing on of ITC benefits to home buyers. Final Decision: After considering the DGAP's reports, submissions from both parties, and relevant material, the Commission concluded that the case did not fall under the Anti-Profiteering provisions of Section 171 of the CGST Act, 2017. It was found that the Respondent did not benefit from additional ITC post-GST, and there was no reduction in the tax rate. Consequently, the application against the Respondent for charging GST on PLC was dismissed, and all parties were provided with a copy of the order.
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