9911796707
TMI Blog2019 (11) TMI 1311X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment in the project al "Navkar Darshan" of Flat No, 201, Navkar Darshan, Shridhar Nagar, Chinchwad, Pune-411033. The Applicant No. 1 also alleged that the Respondent had not passed on the benefit of Input Tax Credit (ITC) by way of commensurate reduction in the price of the apartment purchased by him, on implementation of GST w.e.f. 01. 07.2017,The aforesaid application was examined by Maharashtra State Screening Committee in its meeting and upon being prima facie satisfied that the Respondent had contravened the provision of Section 171 of the CGST Act 2017 forwarded the same with its recommendation to the Standing Committee on Anti-Profiteering for further action in terms of Rule 128 of the CGST Rules, 2017 on 16.08.2018. The said application was examined by the Standing Committee on Anti-Profiteering in its meeting held on 08.10,2018 and it had referred the application to the DGAP for investigation under Rule 129(1) of the CGST Rules, 2017 to determine whether the benefits of reduction in the rate of tax or ITC had been passed on by the Respondent to his recipients. 2. Thereafter, the DGAP issued a notice to the Respondent on 14.01.2019 under Rule 129 of the above Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the ITC pertaining to the unsold flats as on 02.02.2018, was required to be reversed by the Respondent. The computation of the proportionate ITC pertaining to the unsold area which was required to be reversed by the Respondent is furnished in Table-A below:- Table - 'A' Particulars Factor Amount Total saleable Area of Flats (in Sq. mtr.) A 1,240.49 Area Sold before completion certificate is obtained (in sq. mtr.) B 964.67 Area sold before completion certificate is obtained (in Percentage) C=B/A 77.77% Area remaining unsold when completion certificate is obtained (in sq. mtr.) D=A-B 275.82 Area remaining unsold when completion certificate is obtained (in Percentage) E=D/A 22.23% ITC available for the period between July, 2017 till December, 2018 as per GSTR-3B (in Rs.) F 24,40,762 Proportionate ITC to be reversed (in Rs.) G=F*E 5,42,698 Input Tax Credit availed post GST pertaining to sold units (in Rs.) H=F-G 18,98,064 6. The DGAP in his Report has further stated that prior to 01.07.2017 i.e.. in the pre-GSA' era, the Respondent was eligible to avail CENVAT credit of Service Tax paid on input services only and that no credit was admissible to him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Table-ST above, the comparative figures of the applicable tax rare and ratio of ITC to the turnover during the pre-GST & post-GST periods as well as the recalibrated basic price and the excess realization (Profiteering) during the post-GST period, are tabulated in the Table-'C' Table - 'C' (Amount in Rs.) S.No. Particulars Pre-GST Post-GST Period A April, 2016 to June, 2017 July, 2017 to December,2018 1. Tax Rate B 5.5% 12% 2. Ratio of CENVAT credit/Input Tax Credit to Turnover as per Table B above (%) C 0.14% 4.08% 3. Increase in input tax credit availed post-GST (%) D=4.08% less 0.14% - 3.94% Analysis of Increase in input tax credit 4. Basic Price collected during July, 2017 to December, 2018 E 1,32,25,000 5. GST @ 12% on Basic Price F=E*12% 15,87,000 6. Total Demand collected/raised G=E+F 1,48,12,000 7. Recalibrated Basic Price H=E*(1-D) or 96.06% of H 1,27,03,935 8. GST @ 12% on recalibrated Basic Price I=H*12% 15,24,472 9. Commensurate Demand J=H+I 1,42,28,407 10. Excess Realization or Profiteering Amount K=G-J &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over would be distorted and erroneous. Therefore, the benefit of ITC in respect of these 11 units would have to be calculated when the consideration was received from the concerned home buyers, by taking into account the proportionate ITC in respect of such units. 11. Moreover, the DGAP has stated that post-GST, the benefit of additional ITC of 3.94% of the turnover had accrued to the Respondent for the said project and that this benefit would have been passed on to the recipients. Hence, Section 171 of the CGST Act, 2017 requiring that -any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices" had been contravened by the Respondent and an additional amount of Rs. 5,83,593/- had been realized by the Respondent from the recipients, which included both the profiteered amount @ 3.94% of the basic price and GST on the said profiteered amount @ 12%. The recipients other than the Applicant were identifiable as per the documents provided by the Respondent and therefore, the profiteered amount was required to be returned to the Applicant and other recipients who were ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idence of Reversal of ITC Credit. The Respondent vide the above mentioned submissions has also stated that he had given the ITC benefit in the rate at the time of booking to the customers and also provided some extra work other than the plan and hence, there wasn't any liability against him. The Applicant No. 1 has never appeared for the hearing. However, vide e-mail dated 20,07.2019, he has stated that the Respondent had offered to pay Rs. 39,715/- against his demand of Rs,67,500/-. that the Respondent had made undue profit which he had admitted and hence, requested to direct the Respondent to pay him Rs. 67,500/- along with interest. 14. This Authority has carefully examined the DGAP's Report, the written submissions of the above Applicants as well as the Respondent placed on record, The issues to be decided by the Authority are as under:- 1) Whether there was any violation of the provisions of Section 171 of the CGST Act, 2017 in this case? 2) If yes then what was the quantum of profiteering? 15. Perusal of Section 171 of the CGST Act shows that it provides as under:- (1). "Any reduction an rate of tax on any supply of goods or services or the benefit of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall reduce the price to be realized from the buyers of the flats commensurate with the benefit of ITC received by him as has been detailed above. The above amount of Rs. 5,83,593/- which includes 12% GST on the base profiteered amount of Rs. 5,21,066/- has been profiteered by the Respondent from the Applicant No. 1 and other flat buyers which is required to be refunded to the above Applicant No 1 and other flay buyers alongwith interest @18% from the date when the above amount was profiteered by him till the date of payment as per the provisions of Rule 133(3)(b) of the above Rules. The profiteered amount alongwith applicable interest shall be paid by the Respondent within a period of 3 months from the date of this order, failing which the same shall be recovered by the concerned Commissioner CGST/SGST as per the provisions of the CGST/SGST Act, 2017, under the supervision of the DGAP. A Report confirming the action taken on the directions passed vide this order shall be submitted by the concerned Commissioner CGST/SGST within a period of 4 months from the date of this order. 19. It is also evident from the above narration of facts that the Respondent has denied benefit of ITC to ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
