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TMI Blog2020 (7) TMI 442X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the case that the Respondent has been directed to pass on the benefit of ITC till 30.04.2019 as data only till April, 2019 was available. Any benefit of ITC which may become available to the Respondent post 30.04.2019 would a so be passed on by the Respondent to the eligible buyers, The State Commissioner GST shall ensure that the above benefit is passed on to the eligible buyers and a report is submitted to this Authority through the DGAP within a period of 4 months from the date of this order. Penalty - HELD THAT:- It is also evident that the Respondent has denied the benefit of ITC to the buyers of the flats being constructed by him in his Project Sky Terraces in contravention of the provisions of Section 171 (1) of the CGST Act. 2017. Therefore, he is apparently liable for imposition of penalty as per the provisions of Section 171 (3A) read with Rule 133 (3) (d) of the CGST Act, 2017. Therefore, notice be issued to him to explain why penalty should not be imposed on him. - Case No. 39/2020 - - - Dated:- 10-7-2020 - DR. B. N. SHARMA, CHAIRMAN, SH. J.C. CHAUHAN, TECHNICAL MEMBER, SH. AMAND SHAH, TECHNICAL MEMBER Present:- 1. None for the Applicants. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30.042019. The DGAP has also intimated that in response to the Notice dated 10.07.2019 and further reminders dated 26.07.2019 05.08 2019. Shri Mudit Jain of Dhadda Co., Authorised Representative of the Respondent replied vide letter dated 10.08.2019 and sought an extension of two months to submit the desired document however, subsequently he submitted that he had not been getting any response from the Respondent regarding the proceeding. Vide his letter dated 19.08.2019 he also submitted that due to unavoidable reasons he was withdrawing his authorization for the Respondent and requested that no action against the partners of M/s. Dhadda and Co. should be taken in case of any default made by the Respondent. 6. The DGAP has further intimated that as there was no response from the Respondent, Summons under Section 70 of the CGST Act. 2017 reed with Rule 132 of the above Rules, were issued to Sh. Rituraj Singh, Director and Sh. Rajat Jain, Manager of the Respondent asking them to appear at DGAP s office and produce the relevant documents, However, they neither appeared nor furnished the desired information. Vide letter dated 06.09.2019 the Respondent replied that Sh. Rituraj Si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt on 21.10.2019 along with the deputed officers of the CGST and SGST. During the visit all the requisite documents/information was collected from the Respondent and a statement of facts was signed by the staff present at the premises of the Respondent. Vide the aforesaid statement, the staff of the Respondent had submitted the followings:- (a) That the Respondent was registered under the Goods and Service Tax vide Registration No 08AAHCA1799N2ZT and was engaged in development and construction of residential and commercial complexes and was running only one project Sky Terraces which was started on 07.06.2013. The Respondent had started giving possession of the flats constructed in the above project to the customers in the year 2018. There were 252 residential flats and 24 commercial shops in the said project out of which 215 units had been sold and approx. 60 to 70 families were living in the above project. The project had been completed about March, 2018 and the Respondent had applied for the completion certificate which had riot been received yet. (b) That in the pre-GST regime the Respondent was discharging 1% VAT under the composition scheme and post-GST he was disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. On Roof Casting 3. On Roof Casting of Upper Basement 4. On Roof Casting of 1 st Floor 15.06.2014 13.63% 8,67,270 99,450 26,799 0 0 9,93,519 5. On Roof Casting of 5 th Floor 15.06.2014 13.63% 8,67,270 26,799 0 0 8,94,069 6. On Roof Casting of 8th Floor 15.06.2014 13.63% 8,67,270 26,799 0 0 8,94,069 7. On Roof Casting of 12th Floor 01.08.2014 13.63% 8,67,270 99,450 39,091 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the registered person partly for effecting taxable supplies including zero-rated supplies under this Act or under the integrated Goods and Services Tax Act and partly for effecting exempt supplies under the said Acts, the amount of credit shall be restricted to so much of the input tax as Is attributable to the said taxable supplies including zero-rated supplies. . Section 17 (3) The value of exempt supply wider sub-section (2) shall be such as may be prescribed, and shall include supplies on which the recipient is liable to pay tax on reverse charge basis, transactions in Securities, sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building . 13. Therefore, the DGAP has stated that the ITC pertaining to the unsold units was not taken in to account by him during the present investigation and the Respondent was required to re-fir the selling prices of such units by considering the net benefit of additional ITC which would be available to him post-GST. 14. The DGAP has also informed that as the Respondent had not submitted any details/information, he has put his best efforts to collect and arrange the information to initiate and conclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 85 5,68,285 As per Project Brochure, other clearance documents List of Home Buyers 7. Total Sold Super Built-up Area (in SQF) relevant to turnover (G) 256814 364437 As per List of Home Buyers 8. Relevant lTC [(H)=(D)*(G)/(F)] 32,17,499 1,91,81,230 Ratio of lTC Post-GST [(I)=(H)/(E)] 1.41% 6.79% 16. Therefore, the DGAP has claimed that it was established from the above Table that the ITC as a percentage of the turnover that was available to the Respondent during the pre-GST period (April, 2016 to June, 2017) was 1.41% and during the post-GST period (July. 2017 to April, 2019). it was 6.79% which showed that post-GST. the Respondent has benefited from additional ITC to the extent of 5.38% [6.79% (-) 1,41%] of the taxable turnover. 17. Based on the above factors the DGAP has computed the profiteered amount by comparing the applicable tax and the ITC available in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itional ITC of 5.38% of the taxable turnover should have resulted in commensurate reduction in the base prices as well as cum-tax prices of the flats the benefit of which as per the provisions of Section 171 of the CGST Act, 2017, was required to be passed on to the recipients/flat buyers by the Respondent. 19. The DGAP has accordingly calculated the amount of benefit of ITC which was required to be passed on by the Respondent to each flat buyer including the above Applicant or the profiteered amount as per Annexure-25 of his Report as ₹ 1,70,28,230/- which included 12% GST on the base profiteered amount of ₹ 1,52,03,777/-. This amount includes an amount of ₹ 488/- including the GST on the base amount of Rs, 435/- which has been profiteered by the Respondent from the Applicant No, 1, Thus. the DGAP has claimed that the Respondent has contravened the provisions of Section 171 of the CGST Act, 2017 in as much as the additional benefit of ITC @5.38% of the base prices received by the Respondent during the period between 01.07.2017 to 30.04.2019, has not been passed on to the above Applicant and other recipients by him. 20. The DGAP has also averred that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been arrested by the Special Operations Group, Jaipur. Accordingly, the Directors of the Respondent were served through the Jail Superintendent Jaipur on 14.02.2020. Since, the notice, Report of the DGAP and the Annexure have been duly pasted on the premises of the Respondent on 17.01.2020 in terms of Section 169 of the CGST Act, 2017 as well as the Directors of the Respondent have also been served through the Jail Superintended Jaipur on 14.02.2020 and the Respondent has not appeared or filed any submissions inspite of repeated opportunities he was proceeded against ex-parte vide order dated 11.03.2020. 23. We have carefully considered the Report filed by the DGAP, submissions of the Applicant No, and the other material placed on record and find that a complaint dated 12.08.2018 was preferred before the Rajasthan State Screening Committee on Anti- Profiteering by the Applicant No. 1, alleging profiteering against the Respondent in respect of purchase of a flat in the Respondent s project Sky Terraces , located at V.T. Road, Mansarovar, Jaipur. The above that the Respondent had not passed on the complaint mentioned benefit of ITC which had become available to him, by reducing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uted as ₹ 1,70,28,230/- which includes GST @ 12% on the base profiteered amount of ₹ 1,52,03,777/- The home buyer and unit no, wise break up of the profiteered amount has been given in Annexure-25 by the DGAP. This amount is inclusive of an amount of ₹ 488/- including the GST @12% on the base profiteered amount of ₹ 435/- which is the benefit of ITC due to the Applicant No. 1 as has been mentioned at Sr.No. 171 of Annexure-25. 26. Vide his submissions dated 25.01.2020 and 25.03.2020 the Applicant No. 1 has Submitted that the details of payment made to the Respondent against purchase of Flat No B-1806 were different from the details of payment as has been shown in Table-A of the DGAP s Report dated 10.12.2019. He has also submitted that Copper Wiring charges shown in the Report as ₹ 31,000/- were not part of the Sale Agreement. He has further submitted that the statement of the contained in para-16 (a) of the Report that project stood completed and the Respondent had applied for the completion certificate was not true as a number of facilities committed as per the agreement and brochure had still not been provided. He also requested to exempt him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble as per the list of home buyers prepared by the DGAP, in which their names and addresses along with unit nos. allotted to such recipients have been duly mentioned and hence this amount of ₹ 1,70,27,742/- is required to be refunded to them as well as to the Applicant No. 1. The above amount shall be refunded by the Respondent to the above flat buyers along with interest per annum from the dates from which the above amount was collected by him from the buyers till the payment is made as per the provisions of Rule 133 (3) (b) of the above Rules. The above refund of benefit of ITC shall be made within a period of 3 months from the date of this order failing which the same shall be recovered by the Commissioner SGST and paid to the eligible house buyers. A report in compliance of this order shall be furnished by the Commissioner SGST to this Authority through the DGAP Within a period of 4 months from the date of this order, The Respondent is also directed to reduce the prices of his flats commensurately as per the details mentioned above in terms of Rule 133 (3) (a) of the above Rules. 29. It is also clear from the facts of the case that the Respondent has been directed to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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