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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 ..... the flat, on implementation of GST w.e.f. 01.07.2017. 2. The DGAP has submitted that the Rajasthan State Screening Committee on Anti-profiteering has examined the above application in its meeting held on 30.04.2019 and observed that the benefit of ITC had not been passed on by the Respondent and forwarded the said application with its recommendations to the Standing Committee on Anti-profiteering for further action, in terms of Rule 128 (2) of the above Rules. 3. The above application was then considered by the Standing Committee on Anti-profiteering in its meeting held on 13.06.2019 and was recommended to the DGAP for detailed investigation under Rule 129 (1) of the CGST Rules, 2017. 4. The DGAP on receipt of the above reference had issued notice to the Respondent under Rule 129 (3) of the above Rules to submit reply as to whether the ITC benefit was passed on by him to his recipients and if not to suo-moto determine the quantum of benefit which was not passed on and intimate the same to run. The Respondent was also given opportunity to inspect the evidence produced by the above Applicant during the period from 18.07.2019 to 22.072019. However, the Respondent did not avail of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vestigation, In response to the aforesaid letter dated 11.09.2019. Additional Commissioner, State Tax had informed vide his letter dated 23.09.2019 that he had deputed She Bharat Bhushan Badesra, Commercial Tax Officer, Jaipur III, Special XI. Vide letter dated 04.10.2019, Additional Commissioner (Tax Evasion), office of the Principal Commissioner. CGST & C. Ex- Commissionerate, Jaipur informed that a visit was made by the Superintendent and Inspector of CGST & C, Ex. {A E.) on the Respondent's premises on and no one was found present except Sh. Pankaj Sharma (Group D Employee). It was also stated that all the Directors of the Respondent had already been arrested by the SOG (Special Operations Group), Rajasthan Police. The Additional Commissioner (Tax Evasion) requested that as the Respondent fell under the State jurisdiction, any further communication should be made directly with the State Commercial Taxes Department. 8. The DGAP has further reported that after exhausting all the options to collect the desired documents/information it was decided to depute a team of officers from the office of the DGAP to visit the premises of the Respondent to collect the requisite documents/ re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the soft copies like clearance certificates. j. Copies of ST-3 Returns for the period from April, 2016 to June, 2017. k. Copy of the Bank statement for the period from 01.04.2018 to 31.05.2019. l. Copies of RERA documents. 11. The DGAP in his Report has also submitted that according to the Safe agreement dated 05.05.2014, demand letters and payment recipients collected during the course of the visit, it was observed that the Applicant No. 1 had purchased Flat no. B-1806, measuring 1989 square feet, at total basic sale price of Rs. 66,44,700/- (Rs. 3,200/- basic sale price per square feet, Rs. 99,450/- for Electrification Charges, Rs. 99,450/- for Lease Money, Rs. 50,000/- for corpus fund and Rs. 31,000/- for Copper Wiring), The details of amounts and taxes paid by the Applicant No. 1 to the Respondent have been furnished by the DGAP as per the Table-'A' below.- Table- 'A' (Amount in Rs.) S.No. Payment Stages Due Date Basic % BSP Electricity charges Lease Money, Corpus Fund and Copper Wiring Charges Service Tax VAT GST Total 1. Booking Amount 06.05.2014 11.43% 7,27,520 22,480 7,50,000 2. On Roof Casting 3. On Roof Casti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply 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 conclude the proceedings. Though the period of investigation was from 01.07.2017 to 30.06.2019, however, the Respondent had filed GSTR-3B Returns upto April, 2019 only, therefore, the investigation was limited to April, 2019. Further, he has complied the list of home buyers from the tally software and reconciled it with the statutory returns. 15. The DGAP has also claimed that prior to 01.07.2017 i.e. before the GST was intr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of 5.50% approx,) with the post-GST period (July, 2017 to April, 2019) when the effective GST rate was 12% (GST along with 1/3rd abatement for land value) on construction service, vide Notification No. 11/2017-CentraI Tax (Rate). dated 28.06.2017. The comparative computation of the ITC availed/available during the pre-GST period and the post-GST period and the profiteered amount has been tabulated by the DGAP in the Table-'C' below.- Table-'C' (Amount in Rs.) S.No. Particulars Post-GST 1. Period A July, 2017 to April, 2019 2. Output GST rate (%) B 12% 3. Ratio of CENVAT credit/ ITC to Total Turnover as per Table - 'B' above (%) C 6.79% 4. Increase in ITC availed post-GST (%) D=6.79% less 1.41% 5.38% 5. Analysis of Increase in ITC: 6. Base price raised/collected during July, 2017 to April, 2019 (Rs.) E 28,25,98,087 7. GST raised/collected over Base Price (Rs.) F=E*B 3,39,11,770 8. Total Demand raised/collected G=E+F 31,65,09,857 9. Recalibrated Base Price H=E*(1-D) or 94.62% of E 26,73,94,310 10. GST @ 12% I=H*B 3,20,87,317 11. Commensurate demand price J=H+I 29,94,81,627 12. Excess Collection of Demand or Profite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erved by the DGAP that the Respondent has supplied construction services in the State of Rajasthan only. 22. The above Report was considered by this Authority in its sitting held on 12.12.2019 and it was decided to hear the Applicants and the Respondent on 08.01.2020. The Respondent was also directed to explain why the Report dated 10.12.2019 filed by the DGAP should not be accepted and his liability for violation of the provisions of Section 171 of the above Act should not be fixed. As the notice of hearing was returned undelivered another notice was issued to the Respondent through Commissioner CGST/SGST Jaipur to appear on 30.01.2020 before this Authority, The Additional Commissioner (AE), CGST Jaipur vide letter dated 28.01.2020 informed that he had visited the premises of the Respondent on 17.01.2020 which were found to be locked and therefore proceedings for pasting of the Notice and Other documents under Section 169 of CGST Act, 2017 at a prominent place on the premises of the Respondent was carried out and a panchnama was drawn on the spot in the presence of the witnesses. Further, vide order dated 30.01.2020 the Commissioners CGST/SGST were directed to serve the notice of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, is required to be passed on to the recipients/flat buyers by the Respondent, Both the above Tables have been prepared by the DGAP on the basis of the Returns and the details of flat buyers submitted by the Respondent himself or from the documents collected from his office which have been duly verified by the DGAP. The mathematical methodology employed by the DGAP to compute the benefit of additional ITC which is required to be passed on by the Respondent to his buyers is appropriate, logical, reasonable and in consonance with the provisions of Section 171 (1) of the CGST Act, 2017 hence, the same can be relied upon. The above mathematical methodology has also been carefully considered and approved by this Authority in all such cases where benefit of additional ITC is required to be passed on. 25. Based on the CENVAT/ITC availability in the pre and post GST periods and the details of the amount collected by the Respondent from the flat buyers during the period f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tificate however, a number of facilities as per the agreement and brochure were still required to be provided- In this regard it is mentioned that provision of facilities is not covered under the anti-profiteering measures provided in the CGST Act and the Rules and hence, the above issue cannot be resolved by this Authority. The Applicant may approach the competent forum to get his complaint addressed. 28. Based on the above facts the amount of benefit of ITC which was required to be passed on by the Respondent or the profiteered amount is determined as Rs. 1,70,28,230/- including the GST @12% on the basic profiteered amount of Rs. as has been mentioned in Annexure-25 of the Report dated 10.12.2019, in terms of Rule 133 (1) of the above Rules. This amount includes an amount of Rs. 488/- including GST @12% on the base amount of Rs. 435/- which has been profiteered by the Respondent from the Applicant No. 1. The Respondent has also realized an additional amount of Rs. 1,70,27,742/- which includes both the profiteered amount @5.38% of the taxable amount (base price) and GST on the said profiteered amount from the other 176 flat buyers who were not party in the present proceedings. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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