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TMI Blog2022 (6) TMI 1075X X X X Extracts X X X X X X X X Extracts X X X X ..... o the such homebuyers. The Authority determines that the Respondent has profiteered an amount of Rs. 2,62,56,652/-. Therefore, given the above facts, the Authority under Rule 133 (3) (a) of the CGST Rules orders that the Respondent shall reduce the price to be realized from the buyers of the flats commensurate with the benefit of ITC received by him. The details of the recipients and benefit which is required to passed on to each recipient/homebuyer (including Applicant No. 1) alongwith the details of the unit are contained in the Annexure' A' to this order. The Authority directs that such profiteered amount as determined shall be passed on/returned by the Respondent to the recipients of supply alongwith interest @18% from the date such amount was profiteered by the Respondent uptil the date such amount is passed on/returned to the respective recipient of supply. Penalty - HELD THAT:- The Respondent has committed an offence by violating the provisions of Section 171 (1) during the period from 01.07.2017 to 08.08.2019, and therefore, he is liable for imposition of penalty under the provisions of Section 171 (3A) of the above Act. However, perusal of the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25.01.2021. The Respondent stated that the Project Suncity Avenue-102 comprises 761 residential units and 51 commercial shop units. As per the DGAP's report dated 23.03.2020, while computing the profiteered amount the area of residential units only had been considered whereas the area of the commercial shop units had not been taken into consideration. However, in the total input tax credit; ITC of commercial shop units was also included. Hence, the ratio of turnover and ITC given in the report dated 23.03.2020 was incorrect and the said profiteered amount was required to be recomputed after considering the area of commercial shop units as per the practice followed by this Authority in all other cases. III. The Respondent submitted the following documents/information to the DGAP: a. GSTR-1 GSTR-3B returns for the period from July 2019 to August 2019. b. Details of input tax for the period from July 2019 to August 2019, along with reconciliation with GSTR-3B Returns. c. Electronic Credit Ledger for the period from 'July 2019 to 08.08.2019. d. Copy of O.C. dated 08.08.2019. e. List of home buyers in the project Suncity Avenue-102 from April 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pril 2016 to June 2017) and post-GST (July 2017 to 08.08.2019) periods, were furnished as given in table-'A' . Table-A (Amounts in Rs.) S.No. Particulars Total (Pre- GST) April 2016 to June 2017 Total Turnover (Post-GST) July 2017 to 08.08.2019 1. CENVAT of Service Tax Paid on Input Services used for the project (A) - - 2. Input Tax Credit of VAT Paid on Purchase of Inputs (B) 90,31,262 - 3. Total CENVAT/Input Tax Credit Available (C)= (A+B) 90,31,262 - 4. Input Tax Credit of GST Availed (D) - 4,36,21,316 5. Turnover for Flats as per Home Buyers List (E) 38,44,77,456 78,47,92,567 6. Total Saleable Floor Area for the project Suncity Avenue-102 (Excluding Balcony Area) (in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Period A 01.07.2017 to 24.01.2018 25.01.2018 to 08.08.2019 Total 2. Output GST rate B 12% 8% 12%/8% 3. Ratio of CENVAT credit/ ITC to Total Turnover as per table - 'B' above (%) C 5.21% 5.21% 5.21% 4. Increase in ITC availed post-GST (%) D= 5.21% less 2.14% 3.07% 3.07% 3.07% 5. Analysis of Increase in input tax credit: 6. Base Price raised during July, 2017 to 08.08.2019 (Rs.) E 19,22,38,774 59,25,53,793 78,47,92,567 7. GST raised over Base Price (Rs.) F=E*B 2,30,68,653 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed on to the home buyers, was furnished in table-'C' below:- Table-'C' (Amount in Rs.) Sr.No. Category No. of Units Area (in Sqf) Amount Received Post GST Benefit required to be passed on as per Annex-5 ITC Benefit Confirmed by Authority vide Order No. 81/2020 dated 10.12.2020 Difference (Profiteering) Remark A B C D E F G H=F-G I 1. Jotbir Singh Bhalla 1 532 10,51,838 35,209 37,162 -1,953 No benefit to be passed on 2. Buyers where excess benefit was passed on 715 3,75,536 74,18,34,334 2,48,31,995 2,60,31,762 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs). Also, the Respondent had supplied construction services in the State of Haryana only. 3. The above Report was carefully considered by this Authority and a Notice dated 04.02.2021 was issued to the Respondent to explain why the Report dated 27.01.2021 furnished by the DGAP should not be accepted and his liability for profiteering in violation of the provisions of Section 171 should not be fixed. Further opportunity of hearing/document submission were also given to both the parties on 15.02.2021, 25.03.2021, 12.04.2021 and 12.04.2022. 4. The Respondent has filed his submissions on 15.02.2021 wherein the Respondent has inter-alia submitted the following points:- (a) He has already passed on ITC benefit amounting to Rs. 2,67,88,794/- to the customers as was evident from Table-D of Para 15 of Order No. 81/2020 dated 10.12.2020 passed by this Authority. The said fact has also been mentioned by the DGAP in his report dated 27.01 2021. (b) As per the said report of the DGAP dated 27.01.2021, the profiteering amount has been computed as Rs. 2,62,56.652/-whereas the Respondent has already suo-moto passed on the ITC benefit of Rs. 2,67,88,754/ resulting in excess benefit p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fresh data the DGAP has submitted the Report dated 27.01.2021. The Authority finds that the Respondent was given the benefit of ITC on the supply of Construction Services after the implementation of GST w.e.f. 01.07.2017 and the Respondent was required to pass on such benefit of ITC to the homebuyers by way of commensurate reduction in prices in terms of Section 171 of the CGST Act, 2017. However, it is observed that the benefit was not commensurately passed on by the Respondent to his recipients, taking into account the aforesaid Input Tax Credit availability post GST and the details of the amount collected from the home buyers during the period 01.07.2017 to 08.08.2019, the amount of benefit of ITC not passed on to the recipients or in other words, the profiteered amount comes to Rs. 2,62,56,652/- which includes GST. Further, The Respondent claimed that he had already passed on a substantial amount of GST ITC per the requirements of Section 171 of the CGST Act, 2017 to the homebuyers. The Respondent had submitted that he had passed on the benefit of Rs. 2,67,88,794/- to 736 homebuyers. 9. Given the above facts, this Authority observes that the benefit of additional Input Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.07.2017 to 08.08.2019, and therefore, he is liable for imposition of penalty under the provisions of Section 171 (3A) of the above Act. However, perusal of the provisions of the said Section 171 (3A) shows that it has been inserted in the CGST Act, 2017 w.e.f. 01.01.2020 vide Section 112 of the Finance Act, 2019 and it was not in operation during the period from 01.07.2017 to 08.08.2019 when the Respondent had committed the above violation. Hence, the said penalty under Section 171 (3A) cannot be imposed on the Respondent retrospectively. Accordingly, notice for the imposition of penalty is not required to be issued to the Respondents. 13. The concerned jurisdictional CGST/SGST Commissioner is also directed to ensure compliance of this Order. It may be ensured that the benefit of ITC as determined by the Authority as per the Annexure A of this Order be passed on along with interest @18% to each homebuyer, if not already passed on. In this regard an advertisement may also be published in a minimum of two local Newspapers/vernacular press in Hindi/English/local language with the details i.e. Name of the builder (Respondent) - M/s Suncity Projects Pvt Ltd., Project- Suncity Aven ..... X X X X Extracts X X X X X X X X Extracts X X X X
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