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TMI Blog2023 (8) TMI 1199X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, he is not required to pass on the benefit of ITC to his buyers. The instant case does not fall under the ambit of Anti-Profiteering provisions of Section 171 of the CGST Act, 2017 - the proceedings initiated against the Respondent under Rule 133 (5) of the CGST Rules, 2017 are hereby dropped. - SMT. RAVNEET KAUR, CHAIRPERSON, DR. SANGEETA VERMA, MEMBER, SH. BHAGWANT SINGH BISHNOI, MEMBER ORDER 1. The National Anti-Profiteering Authority (NAA) vide Interim Order No. 15/2022 dated 31.08.2022 in this matter had passed the following order:- i. The Respondent vide his submissions has contended that the DGAP has not incorporated the ITC of VAT in the pre-GST period for the computation of profiteering which ought to have been done. He has further submitted before this Authority that the said ITC on VAT credit was Rs. 7,89,028/- for the period from April 2016 to June 2017 which has been allowed to him by the concerned statutory Authority, in support of which he has submitted VAT Assessment Orders for the period from April, 2016 to June, 2017. The Authority finds that the Assessment Orders for the period from April 2016 to June 2017 issued by the VAT Auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his project Palm Wood Royale Gulmohar Green wherein it had been established that the Respondent had availed the benefit of Input Tax Credit and was required to pass on the benefit thereof in terms of section 171 of the CGST Act, 2017. Thus, there were sufficient grounds to believe that the Respondent was liable to pass on benefits to buyers of this project too, as envisaged under the provisions of Section 171 of the CGST Act, 2017. The matter was investigated by the DGAP in accordance with the aforementioned order of the NAA. ii. The period covered by the current investigation is from 01.07.2017 to 30.11.2019. The time limit to complete the investigation was up to 27.05.2020, as per Rule 133 (5) (b) of the CGST Rules, 2017. However, in light of Covid-19 pandemic, the investigation could not be completed on or before the above date due to force majeure. Accordingly, this report has been furnished by the DGAP in terms of the Notification No. 35/2020-Central Tax dated 03.04.2020, issued by the CBIC under Section 168A of the CGST Act, 2017. iii. The various replies of the Respondent sent vide his letters/emails dated 03.01.2020, 28.01.2020, 13.02.2020, 15.02.2020 and 13.05.2020 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 171 of the CGST Act, 2017 had been confirmed by the National Anti-Profiteering Authority vide its Order No. 62/2019 dated 27.11.2019 and the instant investigation had been ordered under the provision of Rule 133(5) of the CGST Rules, 2017. g) Further, the Respondent Submitted before the DGAP that he had filed Civil Writ Petition No. 1406/2020 before Hon'ble Delhi High Court, against the above-referred Order of this Authority. The Hon'ble High Court in its Order dated 06.02.2020 had allowed the DGAP to comply with the directions of the NAA to hold inquiry in respect of the commercial project. The DGAP has thus reported that the ambit of this instant investigation has been kept limited to the Commercial project only and therefore, profiteering, if any, merits to be computed by taking into account the Input Tax Credit availed by the Respondent and total turnover of the commercial project only. h) DGAP has further reported that according to para 5 of Schedule-III of the CGST Act, 2017, (Activities or Transactions which shall be treated neither as a supply of goods nor a supply of services, reads as Sale of land and, subject to clause (b) of paragraph 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med value addition on the purchase of the inputs. Also, as was evident from the submissions made by the Respondent in his submissions dated 15.02.2020 and 13.05.2020, there was no direct correlation between the turnover for VAT as reported in his VAT returns for the period April, 2016 to June, 2017, and the actual demands raised by him from the buyers. Therefore, the input tax credit of VAT and the VAT turnover have not been considered for computation of the ratio of input tax credit to the turnover for the pre-GST period. Further, post-GST, the Respondent could avail input tax credit of GST paid on all the inputs and the input services. From the data submitted by the Respondent covering the period from April 2016 to November 2019, the details of the input tax credits availed by him, his turnovers from the project Anandam Square , the ratios of input tax credits to turnovers, during the pre-GST (April 2016 to June 2017) and post-GST (July 2017 to November 2019) periods were furnished by the DGAP as per the Table-A given below:- Table-A (Amount in Rs.) S.No. Particular (Pre-GST) April, 2016 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... input tax credits availed/available to the turnovers in the pre-GST and post-GST periods as well as the turnovers, the recalibrated base price, and the excess realization (profiteering) during the post-GST period, were tabulated by the DGAP as has been given in Table-B below:- Table- B (Amount in Rs.) S.No. Particular (Pre-GST) (Post-GST) 1. Period A April, 2016 to June, 2017 July, 2017 to Nov, 2019 2. Output tax rate (%) B 4.50% 12.00% 3. Total input tax credit availed (Rs.) C 8,72,620 3,44,11,808 4. Taxable turnover (Rs.) D 2,87,081 9,03,06,132 5. Total Saleable Residential Area in sq. ft. E 52,976 52,9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt collected by the Respondent from the shop buyers during the period from 01.07.2017 to 30.09.2019, the amount of benefit of ITC not passed on or in other words, the profiteered amount has been quantified by the DGAP as Rs. 2,06,15,692/- which included GST @ 12%, on the base profited amount of Rs. 1,84,06,868/-. The unit-wise break-up of this amount has been given in Annexure-9 of the DGAP's Report. It was also observed that the Respondent had supplied the construction service in the State of Uttar Pradesh only. o) In the instant investigation, he had computed the profiteering covering the period from 01.07.2017 to 30.11.2019 and profiteering, if any, for the period post-November, 2019, had not been examined as the exact quantum of ITC that would be available to the Respondent in future could not be determined at this stage, when the construction of the project was yet to be completed. 3. The NAA after considering the various submissions made by the Respondent, vide its Interim Order No. 15/2022 dated 31.08.2022, referred the matter back to the DGAP to carry out further verification/rectification and to recalculate the profiteered amount as per the provision of Rule 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,72,620 - 2. Input Tax Credit of VAT Paid on Inputs (B) 7,89,028 - 3. Total CENVAT/VAT/Input Tax Credit Available * (C)=(A)+(B) 16,61,648 - 4. Input Tax Credit of GST Availed (D) - 59,31,808 5. Total Turnover from Commercial Area (E) 2,87,081 9,03,06,132 6. Total Saleable Commercial Area in sq. (F) 52,976 52,976 7. Sold Area Relevant to Turnover in sq.ft. (G) 382 31,384 8. ITC proportionate to Sold Area (H)=G/F*C 11,982 35,14,117 9. Ratio of CENVAT/VAT/Input Tax Credi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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