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TMI Blog2020 (1) TMI 1579X X X X Extracts X X X X X X X X Extracts X X X X ..... me GST registration and have a common electronic credit ledger cannot be the ground to club the two projects. It is also pertinent to mention here that the records indicate that the Respondent has apportioned the ITC of the two projects and has thus not utilized the ITC of one project for payment of GST pertaining to other project. The DGAP is directed to investigate afresh by treating the projects separately as has been done in the previous cases which has been quoted by the Respondent by taking merits of the two projects into account so that profiteered amount can be tenably computed. The Respondent is also directed to make available all the documents/proofs/evidences desired by the DGAP. The assessment order clearly states that the Respondent has been collecting VAT from his customers for year 2013-14 to Jun-2017 on pro-rata basis and is also depositing the same in accordance with rules. This documentary evidence being in the form of the VAT assessment order passed by the competent authority is indisputable in its own right. Hence it needs careful consideration without following the rhetorical assertion that similar cases have been decided in the identical manner for the state o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said reference was then examined by the Standing Committee on Anti-profiteering, in its meeting held on 13.12.2018, the minutes of which were received by the DGAP on 07.01.2019, whereby it was decided to forward the same to the DGAP, to conduct a detailed investigation in the matter. 2. Further, the Applicant No. 1 had submitted the following documents along with his application: (a) Copy of demand letters issued to him, both pre-GST and post-GST. (b) Copy of Aadhar Card as proof of identity. (c) APAF form. (d) Various e-mails/letters written to the Standing Committee on Anti-profiteering. (e) Allotment /Cancellation letter issued by the Respondent. (f) Receipts/lnvoices for all the payments made by him. (g) Stamp duty paper purchased after paying Rs. 4,11,000/- (e) Grievances filed vide Registration No. DORVU/E/2018/00731 dated 17.04.2018. (f) Grievances filed vide Registration No. PMOPG/D/2018/0247612 dated 05.07.2018. (j) Snapshots/photographs of the project/flat of the Applicant showing the date wise status/progress in construction of the flats and also as an evidence that materials were being procured in post-GST era and input credit was being availed. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent's company), to appear before the Superintendent of the Directorate General of Anti-Profiteering on 03.06.2019 and produce the relevant documents. In response to the above Summons, Sh. R.K. Tayal, counsel along with representatives of the Respondent, appeared before the Superintendent of the Directorate General of Anti-profiteering on 03.06.2019 and submitted certain documents and informed that the Director was occupied with the marriage of his daughter and sought some more time to submit the remaining documents. Further another Summons was issued on 18.06.2019 to produce the relevant documents and in response of the second summon Sh. Rajendra Pant, authorised representative of the Respondent, appeared before the Superintendent of the Directorate General of Anti profiteering on 21.06.2019and submitted certain documents. 7. The DGAP further stated that the Respondent submitted his replies vide letters/e-mails dated 30.01.2019, 19.02.2019, 12.04.2019, 20.05.2019, 31.05.2019, 03.06.2019, 07.06.2019, 17.06.2019 and 21.06.2019 and submitted following documents:- a) Copies of GSTR-1 returns for the period July, 2017 to December, 2018. b) Copies of GSTR-3B returns for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not sold is 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, which read as under: Section 17 (2) "Where the goods or services or both are used 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 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 Il, sale of building". Therefore, the DGAP claimed that the Input Tax Credit pertaining to the unsold units was outside the scope of this investigation and the Respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e unsold units in these towers, at the time of receipt of completion certificate. Hence, in the absence of any documentary evidence, for the purpose of calculation of the ratio of Input Tax Credit to the turnover, the Input Tax Credit and the turnover in respect of all the flats for which demands had been raised, have been taken into account, irrespective of whether the completion certificate had been issued or not. The details of Input Tax Credit availed have been taken from the ST-3 and the GSTR-3B returns, whereas for the purpose of turnover, data provided by the Respondent, vide their letters dated 07.06.2019 and 18.06.2019, have been taken into account. Moreover, since in the pre-GST period, the VAT was paid on deemed value addition which was also not separately recovered from the homebuyers, the Input Tax Credit or VAT has not been taken into account. From the information submitted by the Respondent for the period April, 2016 to December, 2018, the details of the Input Tax Credit availed by him, his turnover from the project "Jewel of Noida" and the ratio of Input Tax Credit to the turnover, during the pre-GST (April, 2016 to June, 2017) and post-CST (July, 2017 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well as cum-tax price. In terms of Section 171 of the Central Goods and Services Tax Act, 2017, the benefit of such additional Input Tax Credit was required to be passed on by the Respondent to the recipients. The DGAP concluded that by not reducing the pre-GST basic price by 2.71% on account of additional benefit of Input Tax Credit and charging GST @12% on the pre-GST basic price, the Respondent appear to have contravened Section 171 of the Central Goods and Services Tax Act, 2017. On the basis of the aforesaid CENVAT/lnput Tax Credit availability in the pre-GST and post-GST periods and the demands raised by the Respondent on the Applicant and other home buyers on which GST liability @ 12% was discharged by the Respondent during the period 01.07.2017 to 31.12.2018, the amount of benefit of Input Tax Credit not passed on to the recipients or in other words, the profiteered amount comes to which includes 12% GST on the base profiteered amount of 3,51,65,860/-The buyer and unit no. wise break-up of this amount was given in as per the Annex-18 of the Report. Although the Applicant had provided copies of demand letter issued to him and receipt of payments made in the post-GST period, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further submitted that although the DGAP in his Report dated 01.07.2019 mentioned that his name did not appeared in the list of beneficiaries of anti-profiteering benefit as the Respondent in the data submitted to the DGAP, had not mentioned any demand raised from him in the post GST period however, he had received a demand letter for clearance of final dues to claim possession on 04.10.2017 i.e post GST period in which there was an exaggerated demand of approximately Rs. 3,67,221 then what was agreed at the time of booking the flat which included an additional amount towards GST and pro-rata recovery of VAT. Aggrieved by this he filed a complaint to the UP State Screening Committee on Anti-Profiteering and Standing Committee on Profiteering. The Complaint was kept pending by the said committees even beyond the time frame in Rule 128 of CGST Rules, 2017and therefore, he wrote a letter to Finance Ministry and only then the complaint was forwarded by Standing Committee on Anti-Profiteering to the DGAP for investigation. 18. The Applicant No. 1 further submitted that the above mentioned facts have not been included in the DGAP Report dated 01.07.2019 and this was vital for his case a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ST, as is evident from RERA registration itself. Particulars Project 1 Project 2 Project ID UPRERAPRJ4327 UPRERAPRJ4350 Start Date 01.12.2013 01.12.2017 Completion Date April 2017 (Actual completion date as certified by completion certificate) 01.12.2022 (Projected date as declared under RERA) Saleable Area (approx.) 8.6 lakh 1.4 lakh Status Completed Ongoing Ill. He had planned development of the aforesaid land by launching multiple residential projects on such land, in phases at different points of time, with different layouts, cost and pricing structures, target customers etc. He submitted that there was no bar under the law which restricted him from constructing multiple projects on the same piece of land. In other words, it was a prerogative or commercial decision of the Respondent to construct one project or multiple projects on the same piece of land under a common brand of 'Jewel of Noida'. In this regard, reliance was placed on explanation to Section 3 of the Real Estate (Regulation and Development) Act, 2016 ("RERA Act") which specifically provides that where the land was to be developed in phases, every such phase shall be considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts one in respect of credit attributable to inputs, capital goods and services meant for excisable goods and credit attributable to capital goods, inputs and services attributable to the service provided by them. Common CENVAT Credit Rules have been framed in terms of powers conferred by Section 37 of the Central Excise Act, 1944 and Section 94 of the Finance Act, 1994. Rule 3(1) enables a 'manufacturer' or a provider of taxable service' to take credit of specified duties and utilize them to discharge duty liability under Rule 3(4) of the CENVAT Credit Rules. A credit can be utilized for payment of any duty of excise on any final product or for payment of service tax on any output service. The respondent is undisputedly registered as a service provider for providing the services of renting of immovable property. The credit taken by them as manufacturer and service provider has been used both for paying excise duty and for paying service tax. The rules permit taking of credit under a common pool and permit use of the credit from the common pool for different purposes and there is no restriction placed to the effect that credit accounts should be maintained for use for ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gaurav Gulati vs. Paramount Propbuilt Pvt. Ltd (supra) wherein, the authority has accepted the details pertaining to project wise break-up of ITC and turnover and has computed the profiteering with respect to the concerned one project only. VIll. He further submitted that vide his e-mail dated 07.06.2019 to the DGAP he had already submitted a statement showing the project wise break-up of such ITC and turnover to the DGAP as evident from Annexures 13 & 15 of the Investigation Report and also as Annexure C to the Additional Submissions dated 20.08.2019 filed before the DGAP. However, the DGAP had blatantly ignored the aforesaid IX. The DGAP in his reply had alleged that the Respondent in his demand letters, receipts/ invoices, cancellation letter etc. had referred both Project 1 and Project 2 as 'Jewel of Noida' only and therefore it was the same project however, every document generated by the Respondent for his customers clearly mentioned the Unit No. and Tower No. which makes it abundantly clear as to whether the same belongs to Project 1 or Project 2. It is not necessary commercially or in law that the Respondent must mention on his communication that both projects ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on deemed value addition; and b) VAT has not been recovered from the home buyers. Xlll. He further submitted that in the construction of building being a complex composite contract, different VAT Acts of States provide different formula to arrive at the taxable turnover for the purposes of determining the VAT liability and both the VAT as well as service tax laws in the erstwhile regime provided for deemed value addition formulas for the purposes of arriving at the taxable turnover. The VAT being a 'value added tax', the valuation for discharging VAT liability for composite works contract was to be determined and discharged as per the methodology determined and notified by the VAT Authorities and he had claimed the Input Tax Credit of VAT paid on the purchases made. XIV. He further submitted that the assessment of developers in the State of Uttar Pradesh was used to be completed by the VAT Authorities by arriving at a taxable turnover on the basis of cost of material purchased plus 21% markup which was then reduced to 10% in lieu of Hon'ble Allahabad High Court Orders for arriving at taxable turnover to execute VAT liability. He further submitted that his eligibil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al/Joint Commissioner (Appeals) against such Assessment Order for the Financial Years 2014-15 and 2015-16 c) Copy of the assessment order passed by the VAT Authorities for Financial Year 2016-17. d) Copy of certificate issued by the Deputy Commissioner (VAT) certifying that the Respondent has not availed composition scheme in any financial year 2012-13 e) Copy of the Order dated 06.01.2018 passed by UP VAT Tribunal holding cost plus 10% basis is a fair method for determining the taxable turnover f) A copy of demand letter recovering the arrears of VAT from the complainant itself g) Sample Copy of the booking form issued to Applicant No. 1 XVIII. He also cited the case of M/S Signature Global Developers Pvt Ltd (Report dated 21.05.2019), M/S Aster Infrahome Pvt Ltd ( Report 28.02.2019), M/s Bhartiya City Developers Pvt. Ltd.(Report dated 25.02.2019), M/S Lodha Developers (Report dated 30.05.2018),Puri Constructions Private Limited (Report dated 27.08.2018), S3 Infra Reality Private Limited (Report dated 28.11.2018), Pyramid Infratech Private Limited (Report dated 24.05.2018) and Sattva Developer Private Limited (Report dated 28.02.2019), wherein DGAP had allowed VAT ITC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ject basis observed that since the Respondent had not submitted any details of units sold prior to 01.04.2016 and hence the ITC availed by him on the project cannot be rightly assessed. He vide his e-mail dated 21.06.2019 had already submitted the homebuyers data which contains details of flats sold prior to 01.04.2016 and the DGAP must consider the ITC and turnover of whole project (Phase-I) life in the pre-GST period in order to arrive at average percentage of ITC available on a real estate project, the findings of the DGAP in the Impugned Investigation Report, wherein he had calculated the ITC to turnover ratio for the pre-GST period by taking data of partial / truncated period of 15 months i.e. from 01.04.2016 till 30.06.2017 should be rejected on this ground alone. He also submitted that the DGAP which had never sought ITC details of Service Tax and VAT from the Respondent for the period prior to 2016. The Respondent further tabulated hereunder the details of ITC for the period beginning 2013 for reference: Sl. No. Financial Year ITC VAT (Amount in Rs.) CENVAT ST (Amount in Rs.) 1. 2013-14 1,82,22,243 1,68,51,393 2. 2014-15 1,82,48,584 2,23,11,479 3. 2015-16 1, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nes was violative of Articles 14 and 19 of the Constitution of India and therefore the provision of Section 171 of the CGST Act read with Rule 126 of CGST Rules is ultra vires the Constitution of India. Accordingly, the steps taken in pursuance of the same by the standing committee and DGAP were without jurisdiction and arbitrary. XXV. He also submitted that the Methodology adopted by the DGAP in the present case is for determining the profiteering on the basis of ratio of ITC to turnover is erroneous and contrary to the interpretation of Section 171 for the reasons set out hereunder: a) DGAP had failed to consider that in case where all civil structure construction work of a project is complete prior to introduction of GST regime, thereby meaning that the builder had already procured all necessary goods and services in the pre-GST regime for completion of the project, no question of additional ITC of GST arises. In such scenario, as in the present case, even when some portion of the consideration was received post GST, negligible additional ITC was available to the builder/developer and therefore no question of applicability of Section 171 of the CGST Act and consequent 'c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive additional ITC of Rs 49,08,986 was reduced from the ITC of GST claimed post 01.07.2017 as per the Impugned Investigation Report, the revised ITC amount would stand reduced to Rs. 64,449,324. Accordingly, the ITC to turnover ratio for post GST period would stand lowered to 3.80%. Therefore, the findings of the DGAP in the Impugned Investigation Report is without appreciation of material, factual and legal aspects and deserves to be set aside. The Respondent had already submitted a summary of sample analysis of few procurement obtained from various vendors along with invoices leading to such additional cost on account of increased rates of GST which is Annexure 1 to our Additional Submissions dated 12.09.2019. e) DGAP had failed to understand that certain inputs in construction including bricks, stones and dust stone aggregate etc. were exempted from VAT in the pre-GST period. However, in the post GST period, such input suffers GST @ 5%. He submitted, while computing the input GST, the amount of GST on such tax free items had been considered by the DGAP which would be detriment to the Respondent. Therefore, he submitted, DGAP while computing profiteering, if any, should have el ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot on the revenues generated. Simply put, the ITC is available on amount of inputs and input services procured by a builder during a particular period and not on the amount of consideration received from a customer. The same becomes more evident from the following illustrations: i. A builder launches a project and takes loan from bank to start construction, various goods and services are procured by the builder for construction works. However no or negligible amount is received from the customers. In such circumstances, while the ITC amount would be huge, the turnover would be meagre leading to distorted ITC to turnover ratio; ii. Similarly, in the next years when such builder would receive substantial amount from customer, but the comparative construction would be lower, the ITC to turnover ratio would again get skewed. iii. Also, for instance, where a builder sells all flats in a year on down payment basis, but the construction takes place in 3 years, ITC to turnover ratio would be highly skewed in 2nd and 3rd year where no payments are received from customers. Similar complexities would arise in scenarios where the flats are sold on different payment plans such as 50:50 pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CGST Act connotes that no registered person should make additional profits in respect of the taxes not available as credit under the erstwhile regime and hence included in the cost which however, on implementation of GST, did not remain as cost and accordingly such benefit of non-creditable taxes should be passed on the end of the customer. In this regard, he submitted that the taxes paid on services were available as credit to the Respondent even under the erstwhile regime and the prices were accordingly determined. Since taxes pertaining to services were available as credit under both the regimes, considering such credit while computing the additional benefit on account of Section 171 of the CGST Act would reflect an incorrect profiteered amount. Accordingly, he submitted that credit of taxes paid on services should be excluded for the purpose of computing benefit under the Anti-Profiteering measures. m) DGAP had failed to seek information/ take into consideration VAT (WCT) paid to subcontractors by the Respondent on turnover and his eligibility to claim ITC of the same as was considered by Hon'ble NAA in case No. 60/2019 in Shri Abhishek v. Signature Global Developers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urnover Ratio and pre-CST ITC to Turnover Ratio would be in negative. XXVIII. He has also submitted that the DGAP had incorrectly included GST already paid by him to Government in value of profiteering and even if he assumed for the sake of argument that there was an excess ITC benefit of 2.71% he should have reduced the base price by 2.71% i.e. by Rs 3,51,65,860, the DGAP has erred in calculating the profiteered amount as Rs. 3,93,85,763/- (as mentioned in Table C of the Investigation Report) by incorrectly including 12% GST on such base profiteered amount which had already been deposited with the Central and state governments and in no manner such amount can be said to have been 'profiteered'. XXIX. He has challenged the proceedings on following other miscellaneous grounds:- a. The provisions of CGST Act and Rules made therein pertaining to anti-profiteering which are violative of Article 19(1)(g) of the Constitution of India. b. Rule 126, 127 and 133 of CGST Rules suffers from the vice of excessive delegation. c. In absence of judicial member, constitution of NAA is improper. d. Any order by NAA shall be passed in compliance of the principles of natural justi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 03.01.18 issued by the Respondent, it was seen that the name of project mentioned was "The Jewel of Noida" only and not project 1 or project 2. Further, in the stamp duty paper of dated 13.02.18, the property is described as "The Jewel of Noida" and not project 1 or Project 2. The strategy of splitting into Project 1 or 2 was only an afterthought by the Respondent to escape from clutches of law. Further, the Respondent did not submit, separate CENVAT Credit Ledger, bifurcation of ITC across projects and reconciliation of home-buyers data with ST-3 or GSTR returns during the investigation so as to establish the contention that the two projects, as claimed, were separate projects for the purpose of investigation. ll. The DGAP submitted also that the details such as formal approval of layouts as well as commencement certificate for the all the towers as issued by NOIDA Authority were not made available to the DGAP during course of investigation. Through the Respondent stated that the formal approval of layout as well as commencement certificate of the Project 1, as claimed, was Issued by NOIDA Authority on 27.06.2013 but the Respondent is silent on when the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a on one pretext or another. The Respondent even submitted incorrect details of ITC which is corroborated by the fact as the revised data were submitted only on 06.06.2019 and project wise GST calculation were submitted only on 07.06.2019. Also, as claimed by the Respondent that he had submitted project wise details of calculations vide his submission dated 07.06.2019, the DGAP submitted that in the said reconciliation of turnover and Tax details provided, for the period 01.04.2016 to 30.06.2017 the Respondent showed taxable Turnover for purpose of Service Tax to be Rs. 25,83,67,090/-, whereas in their ST-3 returns the corresponding figure was Rs. 23,69,74,972/- and Gross taxable turnover was of Rs. 66,87,49,135/- Similarly, for the period 01.07.2017 to 31.12.2018 the Respondent showed taxable Turnover for the purpose of GST to be Rs. 28,61 /-, whereas in its GSTR-3B Returns the corresponding figure is Rs. 28,52,17,352/-. This discrepancy was there even after the revised calculations were submitted. Moreover, the Respondent deliberately did not show any demand details of the Applicant No. 1 in his reconciliation of home-buyers data. Though the said Applicant had submitted copy of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neficiaries. VI. He also submitted that the Respondent has wrongly stated that the reference from Standing Committee was with regard to project 1 only. As per Annex 18 of the minutes of meeting of Standing Committee, S. No. 5 pertains to E-homes Infra Pvt. Ltd. in which it was written "Non passing of benefit of ITC to consumer by builder" (copy enclosed). There was no mention of one Project Only. Also, no evidence was made available to the DGAP to conclusively establish the Respondent's claim that these are really two distinct projects, and Project 2 as claimed, has been launched post-GST and is a completely new one different from the other tower as being claimed. in fact on going through the complaint dated 17.09.2018, he has referred to the project as "The Jewel of Noida" only and not to phase I or phase ll. In the enclosure to the complaint there is Demand Letter dated 04.10.2017 issued by the Respondent in which he has referred to the Applicant's booking in "The Jewel of Noida" and does not refer to phase I or phase Il. In allotment letter dated 27.04.16 by E norms to the applicant, it is mentioned that the apartment is allotted of "T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch the project and takes loan from bank to start construction with negligible amount received from customers and in another year receive substantial amount but comparative construction would be lower and also different payment plans. In this regard, the DGAP observed that Respondent utilized credit of Input Tax Credit for making payments of his output GST. The DGAP has considered that there is a direct relation of Input Tax Credit claimed with that of output tax to be paid, as the use of Input Tax Credit is only towards making payment of its output liability. Therefore, Respondent was required to compute the benefit to be passed on to the recipients on the demands raised after considering the Input Tax Credit available. IX. The DGAP stated that contention of the Respondent that the profiteering needed to be done on a complete project basis may have merit but the profiteering, if any, has to be determined at a given point of time, in terms of Rule 129(6) of the Rules. Therefore, the additional Input Tax Credit available to the Respondent and the amounts received by him from the Applicant and other recipients post implementation of GST, has to be taken into account to determine the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cannot be applied to the case of other state and even case of one developer cannot be compared with case of another developer in the same state. Notwithstanding the provisions contained in the Uttar Pradesh Value Added Tax Act and Uttar Pradesh Trade Tax Act, the fact is that the Respondent have discharged their output VAT liability on a notional/deemed taxable value which is 110% of the purchase price of the inputs and the VAT so paid by the Respondent has not been recovered from the home buyers. Since the taxable value for the purpose of output VAT liability of the Respondent is distinct/different from the actual base price raised/collected from the home buyers, the taxable value reflected in the VAT returns of the Respondent had not been considered for computation of profiteering and instead, the demand shown to have been raised in the home buyers list, has been taken into account as any variation in the credit/VAT liability of the Respondent has no impact on the consideration demanded or received by the Respondent from the home buyers. The credit of any input tax is availed to discharge the output tax liability of the tax payer. In this case, the Respondent has discharged his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for the determination of profiteering, ratio of Input Tax Credit to Turnover for the period just before introduction of GST was compared with the GST period to ascertain the additional benefit of Input Tax Credit available with the Respondent Covering entire period prior to introduction of GST has no logic, as calculation of profiteering had nothing to do with the absolute quantum of credit in the pre-GST period and it is related with the ratio of credit that was available to the Supplier prior to GST and additional benefit of Input Tax Credit which was available to the Respondent on account of introduction of GST. He also submitted that, in case of construction service, it was a continuous supply of service and the supply to the recipients though not yet complete, the benefit of additional Input Tax Credit profiteering, if any had to be determined at a given point of time, in terms of Rule 129(6) of the Central Goods and Services Tax Rules, 2017. Therefore, the additional Input Tax Credit available to the Respondent and the amounts received by him from the Applicant and other recipients post implementation of GST has to be taken into account to determine the benefit of Input Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent claims that there are two separate projects in the impugned investigation. * The DGAP submitted that in absence of conclusive evidence of such claim led to denial of the claim of having to separate projects. The Respondent claims to have duly passed on benefits on account of ITC of GST by way of price reduction by issuing credit notes to the 9 customers who have paid advance in the Tower F of the Project prior to 01.07.2017 However, no documents pointing towards any such claims were made available to DGAP during the period of investigation. The Respondent submission that was evident from the very purpose of the anti-profiteering provisions under the GST law, that any benefit of ITC available to the Respondent with respect to construction of Tower F could only be passed on to the customers of the tower Only, and any direction to the contrary would be erroneous could have been true only when the inputs purchased for each unit would have been separately purchased or bifurcation of Input Tax Credit would have been provided for each unit separately by the Respondent. However, in the event of Respondent's failure to submit details regarding bifurcation of credit availed by him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onclusion that towers B, C, D, E, F and G are part of the same project. VI. He further submitted that that the Section 171 of the CGST Act, 2017 and Chapter XV of the CGST Rules, 2017, require the supplier of gods or services to pass on the benefit of the tax rate reduction to the recipients by way of commensurate reduction in price included both the base price and the tax paid on it if any supplier has charged more tax from the recipients the aforesaid statutory provisions would require that such amount be refunded to the eligible recipients or alternatively deposited in the Consumer Welfare Fund regardless of whether such extra tax collected from the recipient has been deposited in the Government account or not Besides any extra tax returned to the recipients by the supplier by issuing credit note can be declared in the return filed by such supplier and his tax liability shall stand adjusted to that extent in terms of Section 34 of the CGST Act 2017. Therefore, the option was always open to the Respondent to return the tax amount to the recipients by issuing credit notes and adjusting his tax liability for the subsequent period to that extent. 22. We have carefully considered t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... separately by the Respondent. 24. The DGAP has further contended that the Respondent has not been maintaining separate CENVAT Credit Register, Credit Ledger neither he has filed statutory Returns for the project separately to substantiate his claim of the projects being separate and the Respondent did not submit any documents to corroborate that Input Tax Credit being availed in post-GST was not linked to these towers. However, Separate E-Credit Ledger cannot be maintained when the Respondent has single GST Registration and further the Respondent had claimed to that Input Register, Turnover for the two projects was different. The Respondent is directed to submit the reconciled statement of the same to the DGAP to further substantiate his claim of the two projects being independent. 25. We further observe that the Respondent has submitted following documents to substantiate his claim of the project 1 and 2 being separate projects :- i. Copy of the Completion Certificate issued by Noida Authority. ii. Copy of different RERA Registrations for Project 1 and Project iii. Chart showing the reconciliation of the construction area/no. of flats as approved from time to time. iv. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dly by the DGAP under provisions of Section 171 of the CGST Act, on the basis of data reconciled from the statutory Returns of the Respondent. Hence, we opine that it will not be in the interest of equity to club project 1 and project 2 in the present case and hence investigation needs to cover these two projects individually in terms of Section 171 of the CGST, 2017 on merits. Hence, we direct the DGAP is investigate afresh by treating the projects separately as has been done in the previous cases which has been quoted by the Respondent by taking merits of the two projects into account so that profiteered amount can be tenably computed. The Respondent is also directed to make available all the documents/proofs/evidences desired by the DGAP. 27. Further, the findings of the DGAP in investigation Report dated 01.07.2019 need revisiting and further investigation on following counts:- l. The DGAP has submitted in his Report dated 01.07.2019 and Supplementary Report dated 17.09.2019 and 06.12.2019 that the Respondent has not cooperated during the investigation in as much as he failed to submit bifurcation of CENVAT Credit Ledger/lTC, reconciliation of homebuyer data with ST3 or GSTR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... based on whether the conditions for incorporating credit of VAT paid in the pre GST period in the computation of profiteering are fulfilled or not. In view of the above the DGAP is directed to examine the fresh claims made by the Respondent. III. The Respondent has argued that the DGAP has calculated the ITC to turnover ratio for the pre-GST period by taking data of partial / truncated period of 15 months i.e. from 01.04.2016 till 30.06.2017 while ITC to turnover of pre-CST period should have been calculated on the basis of all credit legally available to him in the total period of construction in pre-GST regimes. He has also quoted the case of M/S Paramount Propbuilt Pvt. Ltd. In this regard, we observe that this claim of the Respondent is required to be addressed adequately.. IV. The Applicant No. 1 has vehemently argued that allotment of his flat was cancelled because he had complained to the State Screening Committee on Anti-Profiteering and Standing Committee on Anti-Profiteering. However, the mandate of the Authority is limited to implementation of the provisions of Section 171 of the CGST 2017 and hence the Applicant No. 1 is at liberty to approach the appropriate forum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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