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TMI Blog2020 (3) TMI 1406X X X X Extracts X X X X X X X X Extracts X X X X ..... o the DGAP for investigation under Rule 129 (1) of the above Rules. It is apparent from the perusal of the details of the Electronic Credit Register attached as Annexure-8 with his Report by the DGAP that the Respondent has become entitled to the benefit of ITC during the period from July, 2017 to March, 2019. However, it has not been explained by the DGAP on which project the above ITC has become available to the Respondent and in case this ITC has become available on the purchases made in respect of the above project why the benefit of the above amount should not be passed on to the buyers of the houses in the above project - It is also revealed from the perusal of the e-mail dated 18.04.2019 sent by the ICICI Bank which has given loan to the Respondent for purchasing the above house that the Bank has released payment of Rs. 17,69,850/- vide cheque dated 20.05.2016 and an amount of Rs. 3,90,150/- vide cheque issued on 27.09.2016 in favour of the Respondent. Both the above cheques have been issued during the pre-GST period. It is further revealed that an amount of Rs. 5,40,000/- was released in favour of the Respondent vide cheque issued on 03.04.2018 during the post GST period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so alleged that the Respondent had not passed on the benefit of ITC (ITC) although he had charged GST @ 12% w.ef. 01.07.2017 from him. This application was duly considered by the Standing Committee on Anti-profiteering in its meeting held on 11.03.2019 and was referred to the DGAP for conducting detailed investigation on the allegations levelled by the Applicant No. 1. 2. The DGAP had issued Notice under Rule 129(3) of the CGST Rules, 2017 on 10.04.2019 asking the Respondent to intimate whether he admitted that the benefit of ITC had not been passed on to the above Applicant through commensurate reduction in the price of the house and if so, to suo moto determine the quantum of such benefit and communicate the same with necessary evidence. An opportunity to inspect the non-confidential evidence/information submitted by the Applicant No. 1 was also afforded to the Respondent between 15.04.2019 to 17.04.2019, which he had not utilised. The Applicant No. 1 was also given an opportunity to inspect the non-confidential documents/reply furnished by the Respondent on 30.08.2019, which he did not avail of. 3. The DGAP had sought extension of the time period to complete the inve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above project and the above Applicant had made payments in the said period, the applicable ITC taken by the Respondent should be passed on to the Applicant. In view of the above, Screening Committee had recommended that the above case was fit for further investigation. 6. The DGAP has also stated that the Respondent vide his submission dated 02.09.2019 submitted a Completion Certificate, with regard to the above project, which certified that as on 31.03.2016, construction of the building had been completed, that it was a first class structure in RCC with all fixtures and fittings, it had water supply, electric connection, was served by public road with drainage and street lighting etc. The above Certificate also mentioned that it was fit for use for the purpose it was constructed. The DGAP has further stated that the date of completion of the project i.e. 31.03.2016 was well before the implementation of GST w.ef. 01.07.2017. Further, the Respondent has submitted that the project under investigation contained 14 units, each with 1700 so. ft. of super-built up area, and out of the total, only two units were sold before completion, one of which was allotted to the above Applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Table provides that service by way of Construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier shall attract GST at applicable rate, also clause (b) of Paragraph 5 of Schedule Il of the Central Goods and Services Tax Act, 2017 reads as (b) construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier . 9. On the basis of the above provisions the DGAP has contended that the legal position was very clear which stated that if any unit was booked in an under-construction project before issuance of Completion Certificate by the competent authority, i.e. the entire consideration was not paid after issuance of Compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was a reduction in the rate of tax or increase in the ITC, but neither of them appeared to have been attracted in the present case. 12. The DGAP has concluded that Section 171 (1) of the CGST Act, 2017, relating to profiteering, did not appear to have been attracted in the instant case and the allegation of profiteering against the Respondent did not appear to him to be sustainable. 13. After perusal of the DGAP's report, this Authority in its sitting held on 25.09.2019 decided to hear the Applicant No. 1 on 18.10.2019 and accordingly notice was issued to him, but he has not put in an appearance. However, the above Applicant vide his e-mail dated 17.10.2019 has informed that due to the market slowdown and being a working middle class person, it was difficult for him to afford leave from the job and hence, he would not be able to attend the hearing. With his e-mail, he has attached a letter in which he has stated that he had deposited amount for purchase of a Duplex Row House bearing No.-B3 in the Sahej Valley project being executed by the Respondent at Dandiapalli, Rourkela in the district of Sundergarh. He has also stated that the Respondent has claimed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16 before the implementation of the GST w.e.f. 01.07.2017, as per the Completion Certificate issued by Mr. Arijit Sarkar, Architect and hence the Respondent was not liable for passing on the benefit of ITC. In this connection it would be pertinent to mention that the above Certificate attached as Annexure-17 with the Report of the DGAP, has been issued by a private Architect who does not appear to have any authority to issue the same. The above certificate should have been issued by the competent authority duly notified by the State of Odisha. Therefore, placing reliance on a Completion Certificate issued by a private Architect by the DGAP is not correct and hence, his claim that the above project was completed before coming in to force of the GST cannot be accepted. 15. Itis also apparent from the perusal of the details of the Electronic Credit Register attached as Annexure-8 with his Report by the DGAP that the Respondent has become entitled to the benefit of ITC during the period from July, 2017 to March, 2019. However, it has not been explained by the DGAP on which project the above ITC has become available to the Respondent and in case this ITC has become available on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sold by him out of which 3 units have been sold during the pre-GST period and 6 units have been sold during the post-GST period. However, the DGAP has not mentioned in his Report whether the above claim of the Respondent was correct or not and whether the other buyers of these units were entitled to the benefit of ITC or not. 21. It is also revealed from the perusal of the e-mail dated 18.04.2019 sent by the ICICI Bank which has given loan to the Respondent for purchasing the above house that the Bank has released payment of Rs. 17,69,850/- vide cheque dated 20.05.2016 and an amount of Rs. 3,90,150/- vide cheque issued on 27.09.2016 in favour of the Respondent. Both the above cheques have been issued during the pre-GST period. It is further revealed that an amount of Rs. 5,40,000/- was released in favour of the Respondent vide cheque issued on 03.04.2018 during the post GST period. The above sequence of payment of the above amount by the ICICI Bank on behalf of the Applicant No. 1 shows that he has made payments during both the above periods and hence, he apparently appears to be eligible for the benefit of ITC. 22. Based on the above facts the Report dated 20.09.2019 f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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