9911796707
TMI Blog2022 (6) TMI 1164X X X X Extracts X X X X X X X X Extracts X X X X ..... on the benefit of input tax credit to them by way of commensurate reduction in the price in the project The Roselia Sector-95A" situated at Gurugram, Haryana in terms of Section 171 of the Central Goods and Services Tax Act, 2017. ii. The aforesaid applications were examined by the Standing Committee on Anti-profiteering, in its meeting whereby it was decided to forward the same to DGAP to conduct a detailed investigation in the matter. iii. On receipt of the reference from the Standing Committee on Anti-profiteering, a Notice under Rule 129 of the Rules was issued by the DGAP on 17.12.2020, calling upon the Respondent to reply as to whether he admitted that the benefit of input tax credit had not been passed on to the above Applicants by way of commensurate reduction in prices and if so, to suo-moto determine the quantum thereof and indicate the same in his reply to the Notice as well as furnish all supporting documents. Vide the said Notice, the Respondent was also given an opportunity to inspect the non-confidential evidences/information furnished by the Applicants during the period 28.12.2020 to 30.12.2020. However, the Respondent did not avail of this opportunity. iv. The p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order in view of well settle law in case of M/s GKN Driveshafts (India) Ltd. (2002) 1SCC 72. Relevant para of the judgment was reproduced below: "However, we clarify that when a notice under Section 148 of the Income Tax Act was issued, the proper course of action for the noticee was to file return and if he so desires, to seek reasons for issuing notice. The assessing officer was bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee was entitled to file objections to issuance of notice and the assessing officer was bound to dispose of the same by passing a speaking order. In the instant case, as the reasons had been disclosed in these proceedings, the assessing officer had to dispose of the objections, if filed, by passing a speaking order, before proceeding with the assessment in respect of the above said five assessment years" (e) The Respondent was engaged in the real estate business activities including development and sale of residential/commercial properties. The Respondent launched its Second Affordable Housing Project namely "The Roselia Sector-95A" & allotment of the flats was made on 05.07.2017 under the "Haryana Affordable Housing Pol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... implementation of GST w.e.f. 01.07.2017, Service Tax on construction service was chargeable @ 4.50% (vide Notification No. 14/2015-ST dated 19.05.2015). However, affordable housing had been exempted from the purview of Service Tax vide Notification No. 09/2016-ST dated 01.03.2016. After implementation of GST w.e.f 01.07.2017, GST on construction service was chargeable @ 18% (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 and the effective GST rate on construction service in respect of affordable and low-cost houses upto a carpet area of 60 square meters was further reduced to 12% GST (effective rate was 8% in view of 1/3rd abatement on value), vide Notification No. 1/2018-Central Tax (Rate) dated 25.01.2018 (in respect of affordable and low-cost house upto a carpet area of 60 square meters). viii. On scrutiny of the documents submitted by the Respondent, it was observed that all the Applicants had been allotted Units alter the introduction of GST. The Respondent had charged GST @18%(effectively 12%) for the period 01.07.2017 to 25.01.2018 and thereafter at the reduced rate of GST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce, it appeared that the anti-profiteering provisions were not applicable to the impugned project under investigation. xi. Section 171 of the Central Goods and Services Tax Act, 2017 comes into play in the event when there was a reduction in the rate of tax or there was an increase in the benefit of input tax credit. In the present case all the events i.e. allotment of units, agreement, booking and construction activities took place in post-GST era. Since the project itself was started after implementation of GST w.e.f. 01.07.2017, there was no pre-GST turnover or input tax credit availability that can be compared with the post-GST turnover and input tax credit, to determine whether there was any benefit that was required to be passed on by way of commensurate reduction in price. On the basis of the details of outward supply of Construction services submitted by the Respondent, it was also observed that the service was supplied in the State of Haryana only. 3. The above Report was considered by the Authority in its sitting held on 25.02.2022 and it was decided to accord opportunity to make submissions to the above Applicants by 15.03.2022 to explain why the Report dated 31.03.202 ..... 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 there was an increase in the benefit of input tax credit. In this case, all the events i.e. booking, allotment of units, agreement, and construction activities took place in post-GST period, therefore, there was no pre-GST turnover or input tax credit available that can be compared with the post-GST turnover and input tax credit, to determine whether there was any benefit that was required to be passed on by way of commensurate reduction in price. Therefore, claim of the above Applicants was not sustainable. 6. Further as per direction in Video Conferencing dated 06.05.2022, the Applicant Nos. 1, 2 and 3 vide their e-mail dated 09.05.2022 had submitted Allotment letter, Demand pre-intimation letter from the builder. 7. The proceedings in the matter could not be completed earlier by the Authority due to lack of required quorum of members in the Authority during the period 29.04.2021 till 23.02.2022, and that the minimum quorum was restored only w.e.f. 23.02.2022 and hence the matter was taken up for proceedings vide Order dated 25.02.2022. 8. We have carefully considered the DGAP's Report and all other submissions which have been pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2018 and thereafter at the reduced rate of GST @12% (effectively 8%) from his buyers in terms of Notification No. 01/2018-Central Tax (Rate) dated 25.01.2018. Further, the GST Council vide its 331d meeting has indeed reduced the rates to 1% without ITC on affordable residential projects w.e.f. 01.04.2019, however it has also been revealed that for the on-going projects, the council had given option to the builder to pay GST at the old rates i.e effective 8% with ITC or new rate of 1% GST without ITC on affordable residential apartments. The quoted FAQs being suggestive in nature are not binding on the Respondent. Since, the allotment and sale of the flats of the Respondent commenced during the post-GST period and therefore there is no price history of the pre-GST, which is only event of increase in ITC in the whole period of investigation. It is found that, the Respondent has not availed of the option of 1% GST without ITC in terms of Notification No. 03/2019 w.e.f. 01.04.2019. 11. It has also been revealed from the first allotment cum demand letter of the Applicant Nos. 1, 2, 3 and 4 that allotment to all the Applicants was made in the Post GST Period. Applicant Date of Demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme Court, vide its Order dated 23.03.2020 in Suo Moto Writ Petition (C) No. 03/2020, while taking suo moto cognizance of the situation arising on account of Covid-19 pandemic, has extended the period of limitation prescribed under general law of limitation or any other special laws (both Central and State) including those prescribed under Rule 133 (1) of the CGST Rules, 2017, as is clear from the said Order which states as follows:- "A period of limitation in all such proceedings, irrespective of the Limitation prescribed under the general law or Special Laws whether condonable or not shall stand extended w.e.f. 15th March 2020 till further order/s to be passed by this Court in present proceedings." Further, the Hon'ble Supreme Court, vide its subsequent Order dated 10.01.2022 has extended the period(s) of limitation till 28.02.2022 and the relevant portion of the said Order is as follows:- "The Order dated 23.03.2020 is restored and in continuation of the subsequent Orders dated 08.03.2021, 27.04.2021 and 23.09.2021, it is directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
