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TMI Blog2020 (12) TMI 785X X X X Extracts X X X X X X X X Extracts X X X X ..... conditions for allotment of Flat were settled. It is also apparent from the record that the Respondent had received the Environment Clearance from the State Environment Impact Assessment Authority Haryana on 21.08.2017, also the work order for construction to contractor was given on 22.09.2017 before which he could not have started the execution of the project. On the basis of the sequence of the above events it could be safely concluded that the above project had been started after coming in to force of the GST w.e.f. 01.07.2017. It is also clear that the draw of lots for allotment was held on 27.10.2017. The first agreement between the buyer and the Respondent was executed on 08.11.2017. Therefore, it was apparent that the Applicant No. 1 had applied for allotment and was allotted the above flat after coming in to force of the GST w.e.f. 01.07.2017. Since the above project was not under execution in the pre-GST period i.e. before 01.07.2017 therefore, no comparison could be made between the ITC which was unavailable to the Respondent before 01.07.2017 and after 01.07.2017 to determine whether the Respondent had benefitted from additional availability of ITC or not. Thus, it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in the price of his residential unit and that GST had been charged on the amounts due to him against payments to be made by him to the Respondent. Along with the application, Applicant No. 1 also submitted copies of demand letters issued by Respondent to him. On receipt of the aforesaid reference from the Standing Committee on Anti-profiteering on 09.10.2019, a Notice under Rule 129 of the Rules was issued by the DGAP on 22.10.2019, calling upon the Respondent to reply as to whether he admitted that the benefit of ITC had not been passed on to the recipients by way of commensurate reduction in price and if so, to suo moto determine the quantum thereof and indicate the same in his reply to the Notice as well as furnish all documents in support of his reply. Further, the Respondent was allowed to inspect the non-confidential evidence/information which formed the basis of the said Notice, during the period 30.10.2019 or 31.10.2019. However, the Respondent did not avail of the opportunity. Further, vide his e-mail dated 24.01.2020, Applicant No. 1 was also given an opportunity by the DGAP to inspect the non-confidential documents/reply furnished by the Respondent on 03.02.2020 or 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GST regime and balance was paid after the introduction of GST, to ensure that the benefit of additional ITC made available to the service provider upon introduction of the GST regime, which was not available or was a part of the cost in earlier regime, was duly transferred/passed on to the buyers. (vi) That the Hon ble Supreme Court in case of Larsen Turbo Limited others Vs State of Karnataka other s (2013) 65 VST 1 (SC)=2014 1 SCC 708) = 2013 (9) TMI 853 - SUPREME COURT held that The activity of construction undertaken by the developer etc. would be work contract only from the stage he entered into a contract with the flat purchaser (vii) That all the events including the allotment of the Flats on 27.10.2017, the agreement between him (the Respondent) the Buyer duly executed on 08.11.2017 construction activities started on 25.09.2017, occurred within the GST regime. The transaction between the builder the buyer was covered by clause (b) of paragraph 5 of Schedule II of the CGST Act from the date the buyer was allotted the flat i.e. 27.10.2017 or the date of signing of Builder-Buyer Agreement whichever was earlier. Hence, the anti-profiteering provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... area), at a total basic sale price of ₹ 22,49,265/- (@₹ 4000/- basic sale price per sq. ft. for super buildup area of 552.36 sq. ft. and ₹ 500 per sq. ft. for balcony area). The details of amounts and taxes paid by Applicant No. 1 to the Respondent were furnished in Table- A below:- Table- A (Amount in Rs.) SI.No. Payment Stage Due Date Basic% BSP GST Total Rate of GST A B C D E F G=E+F H=F/E 1. At the time of Application 21.07.2017 5% 1,12,463 13,496 1,25,959 12% 2. At the time of Allotment 16.11.2017 20% 4,49,853 53,982 5,03,835 12% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted his residential flat; that, subsequently, the Agreement to sell was executed between the Respondent and Applicant No.1 on 26.11.2017 and the said flat was registered on 30.11.2017 at Gurugram. 9. The DGAP has further reported that during the course of the investigation, the Respondent has contended that Anti-profiteering provisions could not be applied to the project The Millenia as the said project was not in existence on the date of introduction of GST and that the said project had been launched much after 1.07.2017; that the draw of lots for allotment of flats was held only on 27.10.2017; that the Applicant No. 1 had made the payment of the security deposit for the above-mentioned draw of lots on 21.07.2017, i.e. after 1.07.2017.; that the Applicant No.1 was allotted his unit only on 01.11.2017; and that it was pertinent that all the events relating to the booking of flat in respect of Applicant No.1 had taken place after the GST regime had come into force. 10. The DGAP has further reported that scrutiny of the documents/ records furnished by the Respondent revealed that the environment clearance in respect of the subject project was issued to the Respondent only on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ITC by way of commensurate reduction in prices, in terms of the provisions of Section 171 (1) of the Central Goods and Services Tax Act, 2017, did not hold ground. The DGAP has further stated that in this proceeding, any reference to the Central Goods and Services Tax Act, 2017 and Central Goods and Services Tax Rules, 2017 also included a reference to the corresponding provisions under the relevant SGST/UTGST/IGST Acts and Rules. 14. The above mentioned Report of the DGAP was considered by this Authority in its sitting held on 03.03.2019 and it was decided to accord an opportunity of hearing to Applicant No. 1 on 23.03.2020 so that a reasoned and equitable order could be passed in this matter, which had arisen out of the Application filed by the Applicant No. 1 wherein it had been alleged that the Respondent had profiteered and contravened the provisions of Section 171 (1) of the above Act. However, Applicant No. 1 neither attended the hearing nor furnished any submissions on 23.03.2020. Therefore, in the interest of justice, this Authority accorded Applicant No. 1, three further opportunities of being heard on 23.06.2020, 21.09.2020, and 19.10.2020. However Applicant No. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of the project was required to be issued by the competent authority, has been on or before 30 June 2017, and It was certified by any of the following that construction of the project has started on or before 30 June 2017 (i) an architect or (ii) a chartered engineer, or (iii) a licensed surveyor. b) Where commencement certificate in respect of the project, was not required to be issued by the competent authority, it was certified by any of the authorities specified in sub clause (a) above that construction of the project had started on or before the 30 June, 2017. c) Completion certificate has not been issued or first occupation of the project has not taken place on or before the 30 June, 2017. d) Apartments being constructed under the project have been, partly or wholly, booked on or before the 30 June, 2017 18. The DGAP further submitted that in the impugned project The Millennia . (a) The date of commencement was 21.08.2017 (date of receipt of environment clearance) in terms of Para-5.1 of the Agreement to sell entered by the Respondent. (b) The date of start of construction was 25.09.2017. (c) Completion certificate has n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... settled in the present proceedings:- I. Whether there is reduction in the rate of tax on the construction services as alleged by the Applicant No. 1 ? II. Whether there is benefit of additional ITC available to the Respondent which is not passed on by him to the Applicant No. 1 ? III. Whether there is any violation of the provisions of Section 171 (1) of the CGST Act, 2017 by the Respondent? Perusal of the record reveals that the Respondent had got Affordable Housing The Millenia 37D project approved under the Haryana Affordable Housing Policy and allotted flats to the successful buyers on 27.10.2017 through draw of lots He invited applications for allotment of houses via advertisement in newspapers. The Applicant No. 1 had applied for allotment of a flat and the draw of lots for allotment of houses was conducted on 27.10.2017 in the presence of the committee constituted under the above Policy. It is also revealed that first builder buyer agreement was executed on 08.11.2017 vide which the terms and conditions for allotment of Flat were settled. It is also apparent from the record that the Respondent had received the Environment Clearance from the State Environ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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