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TMI Blog2020 (5) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... rate have actually resulted in a commensurate reduction in the prices of the goods or services or both supplied by him. Therefore, this Authority has jurisdiction to examine all such cases in which the above benefits are required to be passed on suo moto or to get them investigated through the DGAP and its power to do so is not circumscribed by any restriction to the effect that it cannot examine those cases in respect of which no complaint has been made - It is also apparent from the provisions of Rule 129 (1) that the DGAP shall investigate and collect necessary evidence in all such cases in which rate of tax has been reduced or the benefit of ITC has been granted which is required to be passed on to the buyers and submit his Report to this Authority under Rule 129 (6) and hence he is bound to investigate all those cases where benefit of ITC or tax rate is required to be passed on. This Authority has not replaced or substituted any function which the Courts were performing hitherto. Though it performs quasi-judicial functions but it cannot be equated with a judicial tribunal. Also, it performs its functions in a fair and reasonable manner in accordance with the Act but does n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 33 (3) (d) of the CGST Rules, 2017 should not be imposed on him. - Case No. 26/2020 - - - Dated:- 15-5-2020 - DR. B.N. SHARMA. CHAIRMAN, SH. J.C. CHAUHAN, TECHNICAL MEMBER, SH. AMAND SHAH, TECHNICAL MEMBER Present:- 1 None for the Applicant No. 1. 2 None for the Applicant No. 2. 3. Sh. Manish Gaur, Advocate. Sh. Sanjeev Sharma, DGM-Tax, Sh. Tarun Trehan, CA, Sh. R. Chitkara, Advocate and Ms. Disha, Advocate for the Respondent. ORDER 1. The present Report dated 24.09.2019 has been received from the Applicant No. 2 i.e. the Director General of Anti-Profiteering (DGAP) after detailed investigation under Rule 129 (6) of the Central Goods Service Tax (CGST) Rules, 2017. The brief facts of the case are that vide his application dated 07.01.2019 filed before the Standing Committee on Anti-profiteering under Rule 128 (1) of the CGST Rules, 2017 ,the Applicant No. 1 had alleged profiteering by the Respondent in respect of purchase of Flat No. EFP 24-0501 in Emerald Floors Premier project of the Respondent. The above Applicant had also alleged that the Respondent had not passed on the benefit of Input Tax Credit (ITC) by way of commensurate reduction in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove Rules. 6. The DGAP has stated in his Report that the Respondent had submitted replies vide his letters/e-mails dated 18.04.2019, 25.04.2019, 15.05.2019, 31.05.2019, 18.07.2019, 26.07.2019, 02.08.2019, 16.08.2019, 22.08.2019 and 17.09.2019. The submissions of the Respondent have been summed up by the DGAP as under:- a) That the unit as referred to in the complaint was one of the categories of the Project Emerald Estates which had other category of unit therein too namely Emerald Estate Apartments . The project Emerald Estate was registered with RERA and the total saleable area of the project was 21,51,306 sq. ft. and it had a total of 1587 units. b) That the Respondent had been a duly compliant corporate citizen and had complied with the provisions of anti-profiteering as envisaged in Section 171 of the CGST Act, 2017. He had also claimed that he had duly passed on the benefit arising on account of ITC in each demand note raised/yet to be raised to the customers in the GST regime and had been passing on the benefit of 1.64% to the customers of the above Project. c) That as per the stay order granted by the Hon ble High Court of Delhi in the case of M/s Ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded. That according to the computation made by the Respondent as per his understanding of the methodology adopted by the DGAP and this Authority in its recent orders, there was a net negative additional ITC ratio based on which there was no profiteering at all in his Project. h) That the CGST Act, 2017 read with the Rules, did not specify the procedure and mechanism of calculation of profiteering, hence the proceedings were arbitrary and liable to be dropped. The above Act and the Rules also did not provide any method or formula of computation to ensure compliance with the anti-profiteering provisions and whether such computation should be made invoice-wise, product-wise, business vertical wise or entity wise. In the absence of the same, it was impossible to defend and explain how the observations and findings on the complaint were incorrect and thus, violative of the principles of natural justice. i) That the investigation must not go beyond the application submitted by the above Applicant as per the Orders of this Authority passed in case No. 01/2018 and 05/2018. As there was only one applicant who had filed the complaint, the DGAP should not suo-moto assume jurisdicti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has further stated that Para 5 of Schedule-III of the CGST Act, 2017, defining activities or transactions which would be treated neither as a supply of goods nor a supply of services, reads as Sale of land and subject to clause (b) of paragraph 5 of Schedule-II, sale of building . Further, Clause (b) of para 5 of Schedule-II of the Central Goods and Services Tax Act, 2017 reads as (b) construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation. whichever is earlier . In the light of these provisions, the DGAP has contended that the ITC pertaining to the units which were under construction but were not sold was provisional ITC that would be required to be reversed by the Respondent, if such units would remain unsold at the time of issue of Completion Certificate (CC), in terms of Section 17 (2) Section 17 (3) of the Central Goods and Services Tax Act, 2017 which read as under:- 17 (2) Where the goods or services or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der construction 12. The DGAP has further submitted that the orders of this Authority cited by the Respondent in his submissions dated 18.07.2019, to restrict the scope of this investigation only to the unit for which the complaint had been filed or same class of buyers and not to the whole project, had been wrongly interpreted and were not relevant to this case. Order No. 01/2018 was related to supply of goods where there was no profiteering in respect of the said product, whereas the other Order No. 05/2018 pertained to the Fast Moving Consumer Goods (FMCG) Sector, where one product was different from another, and there was also no profiteering on the said product. The investigation reports and the final Orders of this Authority in both these cases as quoted by the Respondent, were related to supply of goods on which profiteering was not found. This was not the case in the present investigation. The present case was related to supply of service and the investigation had been kept limited to one project only, where benefit of ITC was to be passed on to all the beneficiaries. 13. The DGAP has also observed from the home-buyer s data submitted by the Respondent that the Respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt as was claimed in the Respondent s submissions and the Respondent did not submit breakup of the purchases made across projects to justify either the credit of VAT for the impugned Project or the VAT turnover. As, there was no direct relation between the turnover reported in the VAT Returns for the period from April, 2016 to June, 2017, filed by the Respondent and their reconciliation with the actual consideration collected from the home buyers, therefore, the credit of VAT and the VAT turnover was not considered for computation of the ratio of ITC to the turnover for the pre-GST period. 18. The DGAP has also informed that the Respondent has claimed credit for Rebate of VAT (WCT) paid to the registered contractors or sub-contractors claiming credit for the same in the pre-GST period. The DGAP has examined this issue in detail and has reported that there was no deduction claimed on account of payment to the works contractors to claim WCT credit for the Project in his VAT Returns submitted to his office. Moreover, in terms of Section 42 of the Haryana VAT Act, 2003 and the relevant Rules, the liability to pay tax was jointly upon the developer (Respondent) and his sub-contracto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igure of turnover. From the information submitted by the Respondent for the period from April, 2016 to March, 2019, the details of the ITC availed by him with respect to the impugned Project, his turnover from the Project Emaar Floor Premier the ratio of ITC to the turnover, during the pre-GST period from April, 2016 to June, 2017 and the post-GST period from July, 2017 to March, 2019), has been furnished by the DGAP in the Table- B given below:- Table - B (Amount in Rs.) S.No. Particulars (Pre-GST) April, 2016 to June, 2017 (Post-GST) July, 2017 to March, 2019 1. Credit of Service Tax Paid on Input Services (A) 5,70,76,754 - 2. ITC of VAT Paid on Inputs (B) - - 3. Total CENVATNAT/ITC Available (C)= (A+B) 5,70,76,754 - 4. ITC of GST Availed (D) - 21,71,38,646 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the post-GST period, has been computed by the DGAP as per the Table- C given below:- Table- C (Amount in Rs.) Sr.No. Particulars Pre-GST Post-GST 1. Period A April, 2016 to June 2017 July, 2017 to March, 2019 2. Output tax rate (%) B 4.50% 12.00% 3. Ratio of CENVATNAT/GST ITC to Total Turnover as per Table - B above (%) C 9.08% 20.98% 4. Increase in ITC availed post-GST (%) D - 11.90% 5. Analysis of Increase in ITC: 6. Total Basic Demand during July, 2017 to March, 2019 E 1,00,22,48,168 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised from such units had only been taken into consideration, Similarly, in the post-GST period, demands were raised on 1239 buyers who had booked the units, and the net total of demands raised from such units had only been taken into consideration. He has further submitted that If the ITC in respect of those units on which no demands had been raised in the concerned period was considered for calculation of profiteering in respect of those units where demands had been raised in the relevant period, the ITC as a percentage of turnover would be distorted and erroneous. Therefore, the benefit of ITC in respect of these 261 (1500-1239) units should be calculated when the demands would be raised on such units by taking into account the proportionate ITC in respect of such units. 26. The DGAP has also claimed that the benefit of additional ITC of 11.90% of the turnover has, in fact, accrued to the Respondent and the same was required to be passed on to the above Applicant and the other recipients. Thus, the DGAP has alleged that the Respondent has contravened the provisions of Section 171 of the CGST Act, 2017 inasmuch as the additional benefit of ITC @ 11.90% of the turnover (base pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GM-Tax, Sh. Tarun Trehan, CA, Sh. R. Chitkara, Advocate and Ms. Disha, Advocate, The Respondent has filed his written submissions dated 03.12.2019, 17.12.2019, 23.01.2020 and 11,02.2020. The main issues raised by the Respondent have been mentioned in the subsequent paras. 29. That the Standing Committee has erred in referring the matter to the DGAP for further investigation. As per Rule 128 (1) of the of the CGST Rules, 2017 on receipt of an application, the Standing Committee was required to examine the accuracy and adequacy of the evidence provided in the application to determine whether there was prima facie evidence to support the claim of an applicant that the benefit of reduction in the rate of tax on any supply of goods or services or the benefit of ITC has not been passed on to the recipient by way of commensurate reduction in prices. On the basis of aforementioned provision, the time limit for the Standing Committee to undertake examination of accuracy and adequacy of evidence of an application was 2 months, extendable by a month. In the instant case, the complaint (e-mail) was filed by the Applicant on 07.01.2019. The Standing Committee had examined the above complaint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g . The Methodology and Procedures, 2018 issued on 19.07.2018 by this Authority under Rule 126 only provided the procedure pertaining to investigation and hearing. However, no method/formula has been notified/prescribed pertaining to calculation of profiteered amount. 32. That the DGAP has arrived at the figures of alleged profiteering on the basis of the difference between the ratio of ITC to the turnover during the pre-GST and the GST periods. This formula for calculating the benefit of additional ITC which has accrued to the Respondent could never yield the correct quantum of profiteering. As the comparison of above ratios was not appropriate for the reason that under the real estate sector, there was no correlation between the turnover and the cost of construction or development of a project. The turnover reflected the amount collected by a developer as per the payment or the booking plan issued by him which was purely based on the market driven strategy, On the contrary, the ITC accrued to a developer on the basis of the actual cost incurred by him while undertaking the development of a project. Thus, accrual of ITC was not dependent on the amount collected from the buyers. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit pre-GST; 3. The demand notes raised by the Respondent formed part of total turnover for the period under consideration and they should not have been ignored; 4. For GST period, the DGAP has considered saleable area in Area sold relevant to turnover for even those customers to whom no demand notes were raised; and 5. The Cenvat credit of Service Tax paid on input services, as also ITC credit of GST availed was not factored in the correct quantum of common credit on account of corporate expenses. 36. In this regard, the Respondent has also quoted the following cases decided by this Authority, in his support:- ➢ Director General of Anti-Profiteering and others v. M/s. Aster lnfrahome Pvt. Ltd. 2019 (11) TMI 1082 NAA . ➢ Director General of Anti-Profiteering and Others v. M/s Puri Constructions Pvt. Ltd. 2019-VIL-24-NAA = 2019 (5) TMI 785 - NATIONAL ANTI-PROFITEERING AUTHORITY . ➢ Director General of Anti-Profiteering and others v. M/s. Bhartiya City Developers Pvt. Ltd 2019 (10) TMI 863 NAA . 37. The Respondent has further submitted that if the above submissions were considered, the revised profiteering calcula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not be able to interpret the law on a regular basis and adjudicate the cases properly. In his regard, the Respondent has quoted the law settled in the cases of Madras Bar Association v. Union of India 2014 (308) ELT 209 (SC) = 2014 (9) TMI 821 - SUPREME COURT , Union of India v. R. Gandhi President Madras Bar Association (2010) 11 SCC 1 = 2010 (5) TMI 393 - SUPREME COURT , Rojer Mathew v. South Indian Bank Limited and Ors. 2018 (13) GSTL 129 (SC) = 2018 (5) TMI 726 - SUPREME COURT , Gujarat Urja Vikas Nigam Limited v. Essar Power Limited (2016) 9 SCC 103 = 2016 (8) TMI 1495 - SUPREME COURT , L. Chandra Kumar v. Union of India (1997) 3 SCC 261 = 1997 (3) TMI 90 - SUPREME COURT and R.K. Jain v. Union of India (1993) 4 SCC 119 = 1993 (5) TMI 23 - SUPREME COURT . The Respondent has also submitted that due to the lack of a Judicial Member in the Authority, exercising of judicial/quasi-judicial powers was against the basic structure of the Constitution of India and it took away the independence of judiciary and was against the rule of law. 40. The submissions of the Respondent dated 03.12.2019 and 17.12.2019 were forwarded to the DGAP for his Report. The DGAP vide his sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing calculation. ii. Saleable area in Area sold relevant to turnover for even those customers, to whom no demand notes were raised, has been considered:- The DGAP has stated that the calculation of profiteering has been done on total area sold only. Only the ITC proportional to relevant sold area has been considered to calculate the quantum of profiteering. iii. The Cenvat Credit of Service Tax paid on input services, as also ITC credit of GST availed has not been factored in the correct quantum of common credit on account of corporate expenses:- In this regard, the DGAP has reported that the last date of submission of the investigation Report was 24.09.2019. Accordingly, the preparation of draft Report had started at least one week before the last date of submission of the Report. In the instant case all the documents submitted on or before 16.09.2019 were taken into consideration for the purpose of finalisation of calculation of profiteering and Report. Any submission made on that day or after it could not be mentioned in his Report. iv. Alleged profiteering has been incorrectly inflated in the report by adding GST:- The DGAP has stated tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat it has passed on benefit of 4.93% to its customers. However, the same was rejected by DGAP on frivolous grounds and by disregarding the fact of actual disbursement of GST benefit by Respondent to its customers. The Respondent submitted that the only requirement was to pass on the benefit to the customers, which the Respondent did in the present case. Thus, benefit to that extent should be extended to the Respondent. During the course of hearing before NAA also, the Respondent has substantiated the fact of actual disbursal of GST benefit, through the relevant documents, listed below - Statement of Accounts (SOAs) of eligible customers, showing credit by Respondent of GST benefit to said customers. In case, the GST benefit shown in SOA was settled by cash , the copy of Cheque , along with the bank statement of Respondent, showing debit in its account to that extent. In case, the balance of GST benefit shown in SOA was adjusted as credit in respect of some other services provided by Respondent like maintenance etc., the SOAs of said other services , showing appropriate adjustments. However, the same was not cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of proportionate area of impugned project. The said submissions dated 17.09.2019 has also been made part of annexures to DGAP report ( Annexure 15 ). Thus, the aforesaid observation by DGAP cannot be accepted. The Respondent humbly submits that the correct quantum of credit of service tax paid on input services, as also ITC credit of GST availed should be considered for the purpose of computing profiteering, if any. 42. We have carefully considered all the submissions filed by the Applicants, the Respondent and the other material placed on record and find that the Applicant No. 1, vide his complaint dated 17.01.2019 had alleged that the Respondent was not passing on the benefit of ITC to him on the Flat No. EFP 24-0501, which he had purchased in the Emerald Floors Premium Project being executed by the Respondent in Sector-65, Gurugram, in spite of the fact that he was availing ITC on the purchase of the inputs at the higher rates of GST which had resulted in benefit of additional ITC to him and was also charging GST from him @12%. This complaint was examined by the Standing Committee on Anti-Profiteering in its meetings held on 11.03.2019 and w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017/Pt./53 dated 20.02.2019 and Sh. Pranesh Pathak, Commissioner CGST, Faridabad, Sh. Sanjay Mangal, Commissioner CGST (Audit), Gurugram, Sh. H. Rajesh Prashad, Commissioner State Tax, Govt. of NCT of Delhi and Sh. Amit Kr. Agarwal, Excise Taxation Commissioner Haryana were appointed as members of the Committee. The reconstituted Committee had examined the above complaint in its meeting held on 11.03.2019 and recommended it for detailed investigation vide minutes of its meeting held on 11.03.2019, which have been attached as Annexure-1 by the DGAP with his Report dated 24.09.2019. Perusal of the minutes shows that the above complaint was mentioned at Sr. No. 11 of Annexure 1-A and has been duly considered and referred for detailed investigation to the DGAP under Rule 129 (1) of the above Rules. Therefore, it is evident that there was neither legally constituted Standing Committee on Anti-Profiteering between the period from 22.01.2019 to 20.02.2019, as per Rule 123 (1) of the CGST Rules, 2017 nor there was quorum to hold meetings of the above Committee, in view of which the above complaint could not have been examined by the above Committee. It is further evident that the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the prices of the goods or services or both supplied by him. Therefore, this Authority has jurisdiction to examine all such cases in which the above benefits are required to be passed on suo moto or to get them investigated through the DGAP and its power to do so is not circumscribed by any restriction to the effect that it cannot examine those cases in respect of which no complaint has been made. It is also apparent from the provisions of Rule 129 (1) that the DGAP shall investigate and collect necessary evidence in all such cases in which rate of tax has been reduced or the benefit of ITC has been granted which is required to be passed on to the buyers and submit his Report to this Authority under Rule 129 (6) and hence he is bound to investigate all those cases where benefit of ITC or tax rate is required to be passed on. 46. It would also be pertinent to mention here that the Government of India, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs vide its Office Order No. 05/Ad.IV/2018 dated 12.06.2018 in pursuance of the Government of India (Allocation of Business) 34tn Amendment Rules, 2018 has assigned the following duties to the DG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard, the Respondent has placed reliance on the case of Dinesh Mohan Bhardwaj and another v. M/s. Vrandavaneshwree Automotive Private Limited, decided by this Authority vide its order dated 27.03.2018 passed in Case No. 1/2018 = 2018 (4) TMI 1377 - THE NATIONAL ANTI-PROFITEERING AUTHORITY . However, in the above case the Applicant had been granted the benefit of ITC and hence there was no ground to investigate the other similar cases as the Respondent had passed on the benefit of ITC whereas in the present case the Respondent has not passed on the benefit of ITC and hence he has been rightly investigated by the DGAP in respect of all the flat buyers to whom he has denied the benefit. Hence, the above case cannot be relied upon in the facts of the present case. In the case of Rishi Gupta and another v. M/s Flipkart Internet Pvt. Ltd., decided by this Authority on 18.07.2018 vide Case No. 5/2018 = 2018 (7) TMI 1490 - NATIONAL ANTI-PROFITEERING AUTHORITY . the Respondent was only an e-commerce platform and was not supplier of the complained product and hence there was no ground to investigate him in respect of the other products. Therefore, the above case does not support ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by the Central and the State Governments and they cannot be appropriated by a registered person. It also signifies that the above benefits are to be passed on each product or unit of construction or service to every buyer and in case they are not passed on, the denial of benefit or the profiteered amount has to be computed for which investigation has to be conducted in respect of all such products/units/services. What would be the profiteered amount has been clearly mentioned in the explanation attached to Section 171 which is quoted as under:- Explanation :- For the purpose of this section, the expression profiteered shall mean the amount determined on account of not passing the benefit of reduction in rate of tax on supply of goods or services or both or the benefit of input tax credit to the recipient by way of commensurate reduction in the price of the goods or services of both. These benefits can also not be passed on at the entity/organisation/branch level as the benefits have to be passed on to each and every buyer at each product/unit/service level by treating them equally. The above provision also mentions any supply which means each taxable supply made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the taxable turnover received before and after the GST implementation would always be different from the other project and hence the amount of benefit of additional ITC to be passed on in respect of one project would not be similar to the other project. Therefore, no set procedure/methodology/guidelines can be framed for determining the benefit of additional ITC which has to be passed on to the buyers of the units. Moreover, this Authority under Rule 126 has been empowered to determine Methodology Procedure and not to prescribe it. Similarly, the facts of the cases relating to the sectors of FMCGs, restaurant service, construction service and cinema service are completely different from each other and therefore, the mathematical methodology employed in the case of one sector cannot be applied in the other sector. Moreover, both the above benefits have been given by the Central as well as the State Governments as a special concession out of their tax revenue in the public interest and hence the suppliers are not required to pay even a single penny from their own pocket and therefore, they are bound to pass on the above benefits as per the provisions of Section 171 (1) which ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be calculated. The value of the turn avers realised by the Respondent during both the above period is relevant as it is relatable to the various stages of construction which is further relatable to the availability of ITC earned by the Respondent on the purchases of the goods and services made by the Respondent during the pre and the post GST periods to achieve a particular stage of construction. Therefore. there is correlation between the ITC and the turnover on the basis of ratios of which the amount of benefit can be computed keeping in view the area purchased by a buyer and the price paid by him in the post-GST period. Since, the benefit is to be passed on the entire project any more or less passing of the benefit periodically by the Respondent can always be adjusted at the time of completion of the project. However, the benefit has to be passed on every month as the Respondent is availing the ITC which has become available to him post-GST every month to discharge his output GST liability while filing his GST Returns. The Respondent cannot force his buyers to wait for the benefit till the completion of the project which may take further 3-4 years when he is enjoying the benefi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DGAP. The Respondent has also not produced any evidence before this Authority which can establish that the Respondent has passed on the above benefit. Therefore, the above contention of the Respondent cannot be accepted on his mere assertion. 53. The Respondent has also argued that the VAT credit earned by him during the pre-GST period should have been considered in calculating the total credit pre-GST. In this regard perusal of the Report dated 24.09.2019 furnished by the DGAP shows that the Respondent was eligible to claim ITC on the VAT paid by him on the inputs purchases made by him. However, in his submission dated 18.07.2019 attached as Annexure-10 with the Report, the Respondent has claimed VAT credit of ₹ 1259/- and turnover of ₹ 9,591/- in respect of the above Project for the period from April, 2017 to June, 2017, whereas no VAT turnover and VAT credit has been claimed for the period from April, 2016 to March, 2017. It is also revealed that the total VAT paid on the purchases made by the Respondent in the State amounted to ₹ 2,67,07,322/- on all the projects being executed by the Respondent in Haryana and not on the impugned project alone. This amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under consideration and they should not have been ignored. In this regard perusal of the record shows that the Respondent vide his e-mail dated 02.08.2019 attached as Annexure-12 with the Report, had submitted the home-buyers data in which he had mentioned several entries which were either negative or were showing very petty figures. The DGAP had sought clarification from the Respondent in this regard in reply to which the Respondent has intimated vide his reply dated 17.09.2019 attached as Annexure-15 that such petty demand notes were issued due to rounding off the adjustments and the amount did not pertain to the demand notes raised on the buyers. The Respondent had also informed that some petty demands were raised on account of services such as delayed payment charges or transfer charges and were not on account of the basic cost of the units. Therefore, the DGAP has excluded those demand notes which were showing negative values or had petty demands upto 1,000/- to get a more accurate figure of turnover. It is also apparent from the record that the additional ITC was available for providing the main service i.e. construction of residential complexes and turnover for other service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 58. The Respondent has also claimed that as per his own computations the ratio of ITC to turnover during the pre-GST period was 18.56% and during the post-GST period it was 19.31% and therefore, the additional benefit of ITC was 0.56% whereas he has already passed on the benefit of 4.93%. In this connection it would be appropriate to mention that the Respondent has included the credit of WTC (VAT) and VAT while computing the ratio of ITC to turnover during the pre-GST period which he has been held not entitled to claim as per the reasons detailed supra. The figures of total turnover, total area sold relevant to turnover and ITC relevant to turnover have also been taken by the Respondent without furnishing evidence and hence, the ratio of ITC to turnover computed by the Respondent for the pre and post-GST periods and the profiteered amount are wrong and hence. the same cannot be relied upon. 59. The Respondent has also cited the law settled in the case of Santosh Kumari and others v. M/s Aster Infrahome Pvt. Ltd., decided on 19.11.2019 by this Authority vide Case No. 57/2019 = 2019 (11) TMI 1082 - NATIONAL ANTI-PROFITEERING AUTHORITY , Case No. 30/2019 decided on 08.05.2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... surate reduction in the prices of the goods or services or both supplied by him. Furthermore, even the Hon ble Supreme Court in the case of R. Gandhi Supra has recognized that there could be an Authority which may have only Technical Members while holding that ...Some highly specialised fact-finding Tribunals may have only Technical Members, but they are rare and are exceptions It is also noteworthy here that there are several other authorities like the Telecom Regulatory Authority of India (TRAI); Securities and Exchange Board of India (SEBI); National Medical Commission (earlier, Medical Council of India); Institute of Chartered Accountants of India (ICAI); Central Consumer protection Authority and the Authorities on the Advance Rulings on the Central Excise and the Goods and Services Tax which do not have a Judicial Member. In this connection it is also submitted that the Parliament and all the State Legislatures (31 States and Union Territories), the GST Council which is a constitutional body created under the 101st Amendment of the Constitution and the Central and the State Governments in their wisdom have not found it necessary to provide for a Judicial Member in this Author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quivalent to the Secretary to the Government of India and the Technical Members should have worked as Commissioners of State or the Central Tax for one year before they are appointed as such. Accordingly, the Chairman and the Technical Members of the Authority are being appointed by the competent authority (Appointments Committee of the Cabinet) of the Union Cabinet keeping the requirements of the above mandate of the GST law in perspective. Moreover, the orders passed by this Authority are further subject to the judicial review and therefore, the Respondent should not have any grievance on this account. Therefore, the above contentions of the Respondent are not tenable. 64. The Respondent has also quoted the judgements passed in the following cases to support his above contention:- (i) Rojer Mathew v. South Indian Bank Limited and Ors. 2018 (13) GSTL 129 (SC) = 2018 (5) TMI 726 - SUPREME COURT . (ii) Gujarat Urja Vikas Nigam Limited v. Essar Power Limited (2016) 9 SCC 103 = 2016 (8) TMI 1495 - SUPREME COURT . (iii) L. Chandra Kumar v. Union of India (1997) 3 SCC 261 = 1997 (3) TMI 90 - SUPREME COURT and R. K. Jain v. Union of India (1993) 4 SCC 119 = 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the post-GST period to calculate the benefit which should be passed on to the buyers as per the provisions of Section 171 (1) of the above Act. The mathematical methodology applied by the DGAP while computing the above ratios and benefit as per the above Tables is correct and the same can be relied upon. 67. It is established from the perusal of the above facts that the Respondent has benefited from the additional ITC to the extent of 11.90% of the turnover during the period from July, 2017 to March, 2019 and hence the provisions of Section 171 of the CGST Act, 2017 have been contravened by the Respondent as he has not passed on the above benefit to his customers and thus he has profiteered an amount of ₹ 13,35,79,636/- inclusive of GST @ 12% on the base profiteered amount of ₹ 11,92,67,532/-. Further, the Respondent has realized an additional amount of ₹ 1,04,734/- which includes both the profiteered amount @ 11.90% of the taxable amount (base price) and 12% GST on the said profiteered amount from the Applicant No. 1. He has further realized an additional amount of ₹ 13,34.74,902/- which includes both the profiteered amount @ 11.90% of the taxable am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules 2017 directs the Commissioners of CGST/SGST Haryana to monitor this order under the supervision of the DGAP by ensuring that the amount profiteered by the Respondent as ordered by the Authority is passed on to all the eligible buyers. A report in compliance of this order shall be submitted to this Authority by the Commissioners CGST /SGST within a period of 4 months from the date of receipt of this order. 71. As per the provisions of Rule 133 (1) of the CGST Rules, 2017 this order was required to be passed within a period of 6 months from the date of receipt of the Report from the DGAP under Rule 129 (6) of the above Rules. Since, the present Report has been received by this Authority on 25.09.2019 the order was to be passed on or before 24.03.2020. However, due to prevalent pandemic of COVID-19 in the Country this order could not be passed on or before the above date due to force majeure. Accordingly, this order is being passed today in terms of the Notification No. 35/2020-Central Tax dated 03.04.2020 issued by the Government of India, Ministry of Finance (Department of Revenue), Central Board of Indirect Taxes Customs under Section 168 A of the CGST Act, 2017. 72. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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