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TMI Blog2022 (5) TMI 781X X X X Extracts X X X X X X X X Extracts X X X X ..... comparison of ITC available before and after 01.07.2017, the Respondent is not required to recalibrate the price of the flat due to additional benefit of ITC. Hence, the allegations of the Applicants made in this behalf are incorrect and therefore, the same cannot be accepted - it is established that the Respondent had not contravened the provisions of Section 171 (1) of the CGST Act, 2017 and there are no merit in the Applications filed by the above Applicants and the same are accordingly dismissed. This Order having been passed today falls within the limitation prescribed under Rule 133 (1) of the CGST Rules, 2017. Application disposed off. - Case No. 05/2022 - - - Dated:- 9-5-2022 - SH. AMAND SHAH CHAIRMAN TECHNICAL MEMBER SH. PRAMOD KUMAR SINGH, TECHNICAL MEMBER SH. HITESH SHAH TECHNICAL MEMBER Present:- 1. None for the Applicants. 2. None for the Respondent. ORDER 1. The Present Report dated 27.11.2020 has been received from the Applicant No. 2 i.e. the Director General of Anti-Profiteering (DGAP) in response to the Authority's Interim Order no. 23/2019 dated 26.12.2019 passed under Rule 133 (4) of the Central Goods Service Tax (CG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scrutiny of the documents (Home buyer's list and allotment letter issued to the Applicant No. 1 dated 08.08.2017) submitted by the Respondent, the DGAP has observed that the project Avenue-51 was launched in the post-GST era and there was no price history of the units having been sold in the pre-GST era which could be compared with the post-GST base price to determine whether there was any profiteering. 5. The DGAP further submitted that in the instant case, the draw of lots, allotment of units and receipt of payments had taken place in the post-GST era. Therefore, there was no pre-GST tax rate or input tax credit structure which could be compared with the post-GST tax rate and input tax credit. He has further submitted that the Respondent has charged GST at the lower rate of 8% w.e.f. 25.01.2018, in terms of Notification No, 01/2018 Central Tax (Rate) dated 25.01.2018. 6. The DGAP has further stated that as the project was launched after implementation of the GST w.e.f. 01.07.2017, apparently there was no pre-GST tax rate or input tax credit availability that could be compared with the post-GST tax rate and the input tax credit, to determine whether there was any bene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had levied 18% GST (effective rate was 12% in view of 1 /3rd abatement on value) on construction service, vide Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. The effective GST rate on construction service in respect of affordable and low-cost housing was further reduced from 12% to 8%, vide Notification No. 1/2018-Central Tax (Rate) dated 25.01.2018. Hence, the Respondent could avail the input tax credit of GST paid on all the inputs and input services. 10. Further, the Standing Committee on Anti-profiteering, vide the minutes of its meeting held on 19.08.2020, forwarded one more application filed by Smt. Ritika Barua (hereinafter referred to as the Applicant No. 2 ) against the Respondent. As the investigation was already underway, the Applicant No. 2 was made a co-applicant in the ongoing investigation. Vide e-mail dated 25.11.2020, an opportunity was given to the Applicant No. 2 for inspection of confidential documents as submitted by the Respondent, which she had not availed. 11. The Respondent submitted his replies to the said Notice, vide letters and e-mails dated 05.09.2020, 05.10.2020 and 20.10.2020. 12. The DGAP in its Report dated 27.11.2020 submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raw of units was held on 08.08.2017 and a unit was allotted to him in the draw. Perusal of the Applicant No.'s records was in line with the Respondent's submission that draw of units in the project was done post-GST only and GST has been accordingly charged according to the prevalent rate. There was no history of allotment of any units in the project prior to implementation of GST. He also quoted the orders passed by the Authority in case of M/s Signature Builders Pvt. Ltd.Order no. 45/2019 and M/s Conscient Infrastructure Pvt. Ltd. Order No. 33/2019. In view of the above and also in view of the fact that the allotment rate of Rs. 4000/- per Sq. ft. was the maximum price and not the price at which any flat was sold by the Respondent, Rs. 4000 per Sq. ft. could not be considered as the pre-GST base price. (ii) The Authority pointed out that it was also apparent from Para 5 of the Affordable Housing Policy that the maximum price of Rs. 4000/- per sq. ft. was fixed on 09.11.2016 after taking in to account the incidence of State and the Central Taxes. As per the admission of the Respondent himself he was not getting benefit of CENVAT and ITC during the pre-GST period. Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by Government was only an indicative price and not the real price at which any flat was sold by the Respondent during the pre-GST period. The Respondent had availed the benefit of ITC in the post-GST period and had admitted that he was not getting benefit of Cenvat during the pre-GST period. Therefore, there is no reference point to compare the benefit of additional ITC to the Respondent. Accordingly, the Respondent was not required to pass on the benefit of ITC which was availed during post-GST period. (iii) The NAA pointed out that it had also not been mentioned in the Report dated 25.06.2019 how the Respondent could continue to charge price of Rs. 4000/- per sq. ft. which was fixed during the pre-GST period in the post-GST period when he was getting benefit of ITC. Reply of the DGAP The DGAP submitted that had the Respondent sold any flat in the pre-GST period at the rate of Rs. 4000/- per Sq. ft., he would certainly be liable to pass on the benefit of ITC availed during the post-GST period and the quantum of benefit could have been arrived at by comparing the turnover and credit during pre post GST periods. But this is not the case here. There is no continuity of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... project. He had also alleged that the Respondent was earning interest on the flat buyer's ITC benefit. The DGAP has also not submitted any Report on the above claim of the Applicant which stated that the Respondent had promised to compute the benefit of ITC on the completion of the project. Reply of the DGAP The DGAP submitted that the Respondent might have informed that he would calculate the benefit of the ITC after completion of the project, it is insufficient to conclude and substantiate that the Respondent has profiteered. In the first place, the allotment and sale of the flats of the Respondent commenced during the post-GST period and there is no price history of the pre-GST period and hence, the provisions of Section 171 of the CGST Act, 2017 are not attracted. This has been the uniform policy adopted by DGAP in respect of such projects which commenced in the post-GST period. In at least two such cases of M/s Conscient Infrastructure Pvt. Ltd. and M/s Signature Builders Pvt. Ltd., the Authority had already upheld this view which has been detailed in reply to point no. above. Moreover, he neither has any evidence to support the claim of the Applicant No. 1 nor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arance . In the present matter Environmental Clearance was obtained from the State Authorities on 21.07.2017, i.e. post-GST period only. After receipt of the clearance, the Respondent with approval of the concerned Authorities advertised in newspaper on 01.08.2017 confirming date of draw for allotment of units to be 08.08.2017. He also submitted that the service rendered by the Respondent by way of construction and development of the project was not in existence during the pre-GST regime and only after draw of flats was made on 08.08.2017, liability to pay tax under provisions of Section 13 of the Act begins. The time of supply of service is guided by provision of Section 13 (2) of the Act. The Anti-profiteering provisions could be applied only to those services which were being supplied before the introduction of GST, to ensure that the benefit of additional ITC (which earlier formed part of the cost but now available as credit) on account of GST implementation or the benefit of reduction in tax rate, was not retained by the supplier but passed on to the recipients by way of price reduction. Accordingly, he reiterated his opinion as mentioned in para 12 of the Report dated 25.06. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t? 17. Perusal of the record reveals that the complaint of profiteering is in respect of purchase of a flat in the Respondent's project Avenue-51 , Sector 92, Gurugram, Haryana. The project is an affordable Housing project as notified by Town Country Planning Department, Government of Haryana vide Notification dated 19.08.2013. The Applicant No. 1 has been allotted flat no. 306 in Tower A and Applicant No. 2 has been allotted flat no. 107 in Tower E of the project. The Respondent had got Environmental Clearance from the State Authorities on 21.07.2017 in the post GST period. After receipt of the clearance, the Respondent with approval of the concerned Authorities advertised in newspaper on 01.08.2017 confirming date of draw for allotment of units to be held on 08.08.2017. The chronology of above events shows that the service rendered by the Respondent by way of construction and development of the project were not in existence during the pre-GST regime. 18. The Applicant No. 1 had been vehemently claiming that he had been denied the benefit of ITC by the Respondent and the Respondent had resorted to profiteering in violation of the provisions of Section 171 (1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Tax (Rate) dated 25.01.2018. 20. From the above facts it is established that there had been no additional benefit of ITC to the Respondent and hence he is not required to pass on the benefit to the above Applicants by reducing the prices of the flats. The Applicant No. 1 and 2 could have availed the above benefit only if the above project was under execution before coming into force of the GST as the Respondent would have been eligible to avail ITC on the purchase of goods and services after 01.07.2017 on which he was not entitled to do so before the above date. Since there is no basis for comparison of ITC available before and after 01.07.2017, the Respondent is not required to recalibrate the price of the flat due to additional benefit of ITC. Hence, the allegations of the Applicants made in this behalf are incorrect and therefore, the same cannot be accepted. 21. Based on the above facts it is established that the Respondent had not contravened the provisions of Section 171 (1) of the CGST Act, 2017 and we find no merit in the Applications filed by the above Applicants and the same are accordingly dismissed. 22. The quasi-judicial proceedings in the matter could ..... X X X X Extracts X X X X X X X X Extracts X X X X
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