9911796707
TMI Blog2020 (12) TMI 888X X X X Extracts X X X X X X X X Extracts X X X X ..... way of commensurate reduction in price in terms of Section 171 of the CGST Act, 2017. Before recommending the investigation under Rule 129 (1) of the CGST Rules, 2017, the aforesaid complaint had been examined by the Standing Committee on Anti-profiteering in its meeting held on 15.05.2019. 2. On receipt of the aforesaid reference and the supporting documents from the Standing Committee on Anti-profiteering on 28.06.2019, a Notice under the provisions of Rule 129 (3) of the CGST Rules, 2017 was issued by the DGAP on 08.07.2019 calling upon the Respondent, to intimate as to whether he admitted that the benefit of ITC had not been passed on to the Applicant No. 1 by way of a commensurate reduction in the price of the flat and if it was so, to suo-moto compute the quantum of the same and mention it in his reply to the Notice along with the supporting documents. Further, vide DGAP's Notice dated 08.07.2019, the Respondent was allowed to inspect the non-confidential evidence/information submitted by Applicant No. 1 on any day between 15.07.2019 and 17.07.2019. The Respondent availed of the opportunity to inspect the non-confidential documents on 17.07.2019. Likewise, vide DGAP' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicant No.1. (f) Details of the various taxes and tax rates leviable in his case in the pre-GST and the post-GST periods. (g) Copy of his Balance Sheet (including all Annexures), his Profit & Loss Account, and Cost Audit Report for financial years 2016-17 & 2017-18. (h) Copy of Electronic Credit Ledger for the period 01.07.2017 to 30.06.2019. (i) CENVAT Credit/Input Tax Credit registers for the period from April 2016 to June 2019. (j) Details of VAT, Service Tax, ITC of VAT, CENVAT Credit, for the period April 2016 to June 2017 and output GST and ITC of GST for the period July 2017 to June 2019 for the project "Suncity Avenue-102". (k) List of homebuyers in the project "Suncity Avenue-102" along with the details of Input Tax Credit benefit passed on. (l) Ledger Account statement maintained by him for his homebuyers. 6. The DGAP has further reported that a careful examination of the case records has revealed that the main issue for determination is as to whether the Respondent had benefitted on account of input tax credit (ITC) as a result of the implementation of GST w.e.f. 01.07.2017 and if so, whether such benefit was passed on by the Respondent to his homebuyers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting 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 under 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". 9. Citing the above provisions, the DGAP has stated that in the instant case, the ITC in respect of those residential units which were under construction but not yet sold is a provisional input tax credit which may be required to be reversed by the Respondent, if such units remain unsold at the time of issue of the completion certificate, in terms of Section 17 (2) & Section 17 (3) of the Central Goods and Services Tax Act, 2017. 10. The DGAP has further reported that in line with the above provisions ITC in respect of the unsold units was kept outside the ambit of this investigation but in the case of these units, the Respondent is required to reduce the selling price thereof, to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; 3,99,574 7. Total Sold Carpet Area (Excluding Balcony Area) (in SQF) relevant to turnover (G) 3,76,068 3,86,498 8. Relevant ITC [(H)= (C)*(G)/(F)] or [(H)= (D)*(G)/(F)] 84,99,974 4,21,93,815 Ratio of Input Tax Credit Post-GST [(I)=(H)/(E)] 2.21% 5.38% 12. Basis the above calculation, the DGAP has reported that ITC as a percentage of turnover that was available to the Respondent during the pre-GST period from April 2016 to June 2017 worked out to 2.21% whereas for the post-GST period from July 2017 to June 2019 it worked out to 5.38%, showing clearly that in the post-GST period, the Respondent has benefited from additional ITC by 3.17% [5.38% (-) 2.21%] of the turnover. 13. The DGAP has further stated that the Central Government had levied GST @ 12% (effective rate) on construction service (after accounting for 1/3rd abatement for land value vide Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. The said effective GST rate on construction service was reduced from 12% to 8% in respect of affordable and low-cost houses up to a carpet area of 60 square meters vide Notification No. 1/2018-Central Tax (Rate) d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, which factored the payments received by the Respondent from his recipients/ homebuyers, including Applicant No. 1, for the period from 01.07.2017 to 24.01.2018, has yielded that the total amount profiteered, for the relevant period, by the Respondent worked out to Rs. 68,25,245/- (inclusive of GST calculated on the base profiteered amount of Rs. 60,93,969/-). Similarly, for the period from 25.01.2018 to 30.06.2019, the profiteered amount worked out to Rs. 2,02,86,672/-, (including GST@8% on the base profiteered amount of Rs. 1,87,83,9551-). Therefore, taking the above two periods together, the total amount profiteered by the Respondent during the period 01.07.2017 to 30.06.2019 came to Rs. 2,71,11,917/- (inclusive of GST). 15. The DGAP has further reported that a scrutiny of the claim of the Respondent regarding his having passed on the ITC benefit to his homebuyers was undertaken by matching the details of his claim against the soft copies of the 'Tax Invoice cum Demand Letter' and the Ledger Account Statement issued to the homebuyers. The scrutiny of the above records has revealed that the Respondent has passed on the ITC benefit of Rs. 2,67,88,794/- to 736 homebuye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .05.2020, offered the Respondent an opportunity to be heard on 01.06.2020 but due to the Covidl9 outbreak the above-said hearing could not be held. Thus this Authority, vide Order dated 01.06.2020, solicited consolidated written submissions from the Respondent and the Applicant No.1, if any, The Respondent and Applicant No.1 were also informed that personal hearing will be held, preferably through video conferencing, only on specific request. However, the Respondent did not make any specific request for a hearing though he furnished his written submissions vide his replies dated 15.06.2020 and 12.08.2020. Applicant No.1 too furnished his submissions vide his letter dated 12.06.2020. 18. The Respondent vide his submission dated 12.06.2020 has, interalia, stated that:- a) He had dully followed the Anti-Profiteering law laid down under Section 171 of the CGST Act, 2017 to the best of his knowledge and belief and accordingly the profiteering element was suo moto passed on by him to his homebuyers by way of commensurate reduction in price; that he had already suo moto passed on ITC benefit amounting to Rs. 2,67,88,794/- to 736 home buyers even before receipt of the 'notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for which needed to be ascertained. 20. The above Applicant has also submitted that the Respondent has also constructed a commercial complex, comprising more than 50 shops within the overall complex/boundary of the project Suncity Avenue 102. The cost of the construction of this commercial complex might have been factored within the overall construction cost of the complete project, i.e. residential and commercial complex and the Respondent could have furnished misleading information regarding the same before the DGAP; that this aspect needed to be checked since the Respondent would have profiteered from the said commercial complex (comprising more than 50 shops that are intended to be sold or leased out separately) that is located within the project and verification of the same was needed to ensure that the benefit has indeed been passed on commensurately to the homebuyers. 21. On receipt of the submissions dated 12.06.2020 of the Respondent and dated 15.06.2020 of Applicant No. 1, this Authority, vide its Order dated 19.06.2020, called for clarifications thereon from the DGAP under Rule 133 (2A) of CGST Rules 2017. In response, the DGAP, vide his letter 09.07.2020, has submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not been taken into consideration while computing the profiteering in respect of homebuyers/ consumers of the residential complex; that, accordingly, the benefit of ITC that needed to be passed on to the homebuyers has been computed considering total ITC available to the Respondent in respect of the project 'Suncity Avenue-102' and the said benefit has been allocated amongst the 736 homebuyers, keeping in mind that out of the 761 residential units, only 736 residential units were sold and other units remained unsold in the relevant period. 22. The abovesaid clarification of the DGAP dated 09.07.2020, was forwarded by this Authority vide its Order dated 14.07.2020, to the Respondent and Applicant No. 1, inviting their submissions, if any, by 28.07.2020. However, neither the Respondent nor Applicant No. 1 filed any submissions till the specified date. In the interest of justice, this Authority, vide its Order dated 29.07.2020, gave the Respondent and the Applicant No.1 further time to submit comments on the clarifications dated 09.07.2020 of the DGAP. In response, the Respondent has informed that due to the Corona Virus pandemic, he could not make his submissions in time an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Yadav 8707 17 Ravi Kumar C003 18 Ekta Yadav & Jitender Yadava C1002 19 Surender Pahuja & Puja Pahuja C1007 20 Sumit Gahlot C108 21 Vidhi Chaturvedi C1104 22 REKHA VIKRAM SINGH C1204 23 Kaneez Fatma C1208 24. MOHAN LAL KAUSHAL & MEENU KAUSHAL C205 25 Shalender Gupta C208 26 Sushma Dutta C305 27 Mayank Bhatnagar & Anita Bhatnagar C402 28 Raman Kumar & Shakuntla C407 29 Madhvi Sharma C503 30 Aman Rekhi C601 31 Satish Yadav & Meenu Yadav C605 32 Vishal Agarwal C608 33 Urmila Singh Sengar C704 34 Surender Kumar C801 35 Vijender Kumar C805 36 Sahil Garg C902 37 Ankur Khunger D108 38 Dharmender Singh Yadav D1101 39 Pushpa Bisht & Prakash Singh Bisht D1108 40 Mayank Arora D1201 41 Nidhi Thakur D203 42 Neeraj Aggarwal D307 43 Shivam Gupta D708 44 Ashok Kumar Adlakha & Geeta Adlakha D907 45 Mamta Rani E1004 46 Vishal Garg E106 47 Ruchika Madaan E107 48 Pranshu Dutt E204 49 Ratnalu Srinivas Rao E401 50 Piyush Sharma E407 51 Akshay Yadav E505 52 Kamlesh Gogia E604 53 Baldev Singh Thakur E702 54 Rahul Goyal E707 55 Sumit Chhabra & Neha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng GST), in respect of the period July 2017 to June 2019, in terms of provisions of Section 171 of the CGST Act, 2017, he has only passed on Rs. 2,67,88,794/- (including GST) to his homebuyers and that the remaining amount of ITC benefit that remains to be passed on to 20 homebuyers (as detailed in Table D of this Order amounts to Rs. 7,14,837/- Hence we take the view that in compliance with the provisions of Section 171 of the CGST Act, 2017, the Respondent is required to pass on ITC benefit amounting to Rs. 7,14,837/- (inclusive of GST) to the twenty homebuyers as detailed at Sr. No. 3 of Table D of this Order. The Respondent is thus directed to pass on the above amount to the said homebuyers within a period of three months of this Order. 27. Further, it is also revealed from the submissions of the Respondent that he has not passed on interest @18% on the profiteered amount to his homebuyers, including Applicant No. 1 and the 20 homebuyers who are yet to receive the commensurate benefit. Hence, in line with the provisions of Section 171 (1) of the CGST Act, 2017 read with Rule 133 (3) (b) of the CGST Rules, 2017, we order that the applicable interest shall be paid by the Respond ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
