9911796707
TMI Blog2022 (8) TMI 1457X X X X Extracts X X X X X X X X Extracts X X X X ..... %. This confirms that in the post-GST period, the Respondent has benefited from additional ITC to the tune of 3.34% (4.26%-0.92%) of his turnover, and the same is required to be passed on by him to the recipients of supply, including the Applicant No. 1, if not already passed on. The Authority finds that the computation of the amount of ITC benefit to be passed on by the Respondent to the eligible recipients works out to Rs. 1,45,87,404/-. This Authority concurs with the DGAP's report dated 28-10-2020. The Authority determines that the Respondent has profiteered by Rs. 1,45,87,404/- in respect of the project Ruparel Orion during the period from 1-7-2017 to 31-12-2019 which includes Rs. 86215/- of the Applicant No. 1 and orders refund/return/passing on of the profiteered amount, if not already done, along with the interest @18% thereon, from the date, when the above determined profiteered amount was profiteered by him till the date of such payment, in line with the provisions of rule 133 (3) (b) of the CGST Rules 2017 - This Authority under Rule 133 (3) (a) of the CGST Rules, 2017 orders that the Respondent shall reduce the prices to be realized from homebuyers/customers/r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect the non-confidential documents/reply furnished by the Respondent between 10-8-2020 and 12-8-2020 which was not availed by Applicant No. 1. vide email dated 30-9-2020 was once again requested to inspect the non-confidential documents on any working day between 1-10-2020 to 7-10-2020. He was also requested to inform whether he had requested for cancellation of his allotment of flat to the Respondent. Applicant No. 1 vide e-mails dated 30-9-2020 and 1-10-2020 informed that he had never requested for cancellation of the flat and he along with his wife was the owner of the flat as of date hence, the contention of the Respondent was incorrect. iii. The period covered by the current investigation was from 1-7-2017 to 31-12-2019. iv. The time limit to complete the investigation was up to 24-7-2020. However, in terms of Notification No. 35/2020-Central Tax dated 3-4-2020 vide which where it was provided that, any time limit for completion/furnishing of any report, had been specified in, or prescribed or notified under the Central Goods and Service Act, 2017 which falls during the period from the 20th day of March 2020 to the 29th day of June 2020, and where completion or compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d output GST and ITC of GST for the period July 2017 to December 2019 for the project Ruparel Orion . (h) Cenvat/Input Tax Credit Register for the Financial Year 2016- 17, 2017-18, 2018-19, and for the period April 2019 to November 2019. (i) List of home buyers in the project ' Ruparel Orion along with details of the benefit passed on. (j) Service tax payment challans for the period April 2016 to June 2017. (k) Details of the project report submitted to RERA including all periodic progress submitted till December 2019. (l) GSTR-9 9C for the F.Y.2017-18. (m) Details of Applicable tax rates, Pre-GST and Post-GST. vii. Vide the Notice dated 28-1-2020, the Respondent was informed that if any information/documents were provided on a confidential basis, in terms of rule 130 of the Rules, a non-confidential summary of such information/documents was required to be furnished. The Respondent, vide letter dated informed that the confidential details were as follows- (a) GST Returns, (b) GST Electronic Ledger (c) VAT Returns (d) CENVAT and ITC Registers (e) List of Home Buyers. viii. The subject application, various replie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lding . Therefore, the ITC on the unsold units may not fall within the ambit of this investigation and the Respondent was required to recalibrate the selling price of such units to be sold to the prospective buyers by considering the proportionate benefit of additional ITC available to him post-GST. x. After the issuance of the Notice of Initiation of Investigation, the Respondent did not submit the documents required for the investigation on the due date. Hence several reminder letters were issued but the Respondent did not submit the documents. As the investigation of Anti-profiteering was time bound, Summons dated 17-7-2020 under section 70 of the CGST Act, 2017, to submit the documents, had to be issued. The Respondent submitted the relevant documents subsequently. xi. The Respondent vide letter dated 3-7-2020 submitted copies of demand letters issued to the above Applicant. The details of the schedule of payment in the installment plan was furnished in Table-A below: Table- 'A' Sl. No. Particulars % Amount 1. Paid on booking of the Flat/Premi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid on the casting of the 12th slab of the building in which the said premises was situated 1.00% 69,420/- 16. Paid on the casting of the 13th slab of the building in which the said premises was situated 1.00% 69,420/- 17. Paid on the casting of the 14th slab of the building in which the said premises was situated 1.00% 69,420/- 18. Paid on the casting of the 15th slab of the building in which the said premises was situated 1.00% 69,420/- 19. Paid on the casting of the 16th slab of the building in which the said premises was situated 1.00% 69,420/- 20. Paid on completion of Brickwork of your apartment in which the said premises was situated 1.00% 69,420/- 21. Paid on completion of internal plastering of your apartment in which the said premises was situated 1.00% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,550/- 35. Paid on completion of Electrical Fittings of your apartment which the said premises was situated 2.50% 1,73,550/- 36. Paid on completion of Electro, Mechanical Environmental requirements in which the said premises was situated 2.50% 1,73,550/- 37. Balance amount payable against possession of the said premises 5.00% 3,47,100/- Total 100% 69,42,000/ The above table shows that the payments to be made by the Applicant were linked to the phase-wise construction of the project. xii. The Respondent had informed that the above Applicant had requested for cancellation of his allotment but the Applicant refuted the claim of the Respondent. As the name of the above Applicant was figuring in the Homebuyers list, profiteering in respect of the Applicant No. 1 had to be computed and the claim/information given by the Respondent had no impact on the profiteering calculation. xiii. The Respondent al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Credit of GST Availed (D) - 5,82,71,633 5. Turnover for Flats as per Home Buyers List (E) 14,45,37,739 38,99.54.121 6. Total Saleable Area (in SQF) (F) 2.93,630 2,93,630 7. Total Sold Area (in SQF) relevant to Turnover (G) 34,470 83,690 8. Relevant ITC [(H)- (B)*(G)/(F)] 13,29,410 1,66,08,497 The ratio of ITC Post-GST [(I)=(H)/(E)] 0.92% 4.26% xv. From the above table-'B', it was clear that the ITC as a percentage of the turnover that was available to the Respondent during the pre-GST period (April 2016 to June 2017) was 0.92% and during the post-GST period (July 2017 to December 2019) it was 4.26% in Project Ruparel Orion . This confirms that post-GST, the Respondent had benefited from additional ITC to the tune of 3.34% [4.26% (-) 0.92%] of the turnover. xvi. It was observed that the Central Gove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent had realized an additional amount to the tune of Rs. 1,45,87,404/-(including GST) which was inclusive of the profiteered amount of Rs. 86,215/- (including GST) in respect of the above Applicant. Further, the investigation reveals that the Respondent had also realized an additional amount of Rs. 1,45,01,189/- as mentioned in Annex-15 which included both the profiteered amount @3.34% of the taxable amount (base price) and GST on the said profiteered amount from 87 other recipients who were not Applicants in the present proceedings. The recipients were identifiable as per the documents on record as the Respondent has provided their names and addresses along with unit no. allotted to them. Further, it was observed that the Respondent had supplied construction services in the State of Maharashtra only. xix. The present investigation covers the period from 1-7-2017 to 31-12-2019. Profiteering, if any, for the period post-December, 2019, had not been examined as the exact quantum of 1TC that will be available to the Respondent in the nature cannot be determined at this stage, when the construction of the project was yet to be completed. 3. A copy of the investigation report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 83,690 82,550 22,470 8. Relevant ITC [(H)=(B)*(G)/(F)] 13,29,410 1,66,08,497 13,73,783 44,59,459 The ratio of Input Tax Credit Post-GST [(I)=(H)/(E)] 0.92% 4.26% 0.95% 1.14% ii. The Respondent further submitted that:- (a) The CENVAT Credit taken during Service Tax Period as per data previously by him was Rs. 1,04,22,099/- (Including opening CENVAT Credit of Rs. 55,35,557/-) therefore CENVAT Credit from April 2016 to June 2017 is Rs. 48,86,542/- against Turnover of Rs. 14,45,37,739/- as per the list of home buyers. (b) There was a difference of Rs. 3000/- in GST Credit taken in the calculation of the department. The actual GST Credit taken was Rs. 5,82,74,633/- instead of Rs. 5,82,71,633/- taken by the DGAP. (c) The total sold area (in SQF) during the period was 1,05,020 SQF (82,550 Pre-GST and 22,470 SQF Post-GST) as per the list of the homebuyers submitted but the area taken by the DGAP for the calculation was 1,18,160 SQF (34,470 SQF Pre-GST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in ITC is 0.19%, due to excess collection of demand or Profiteering amount decreases from Rs. 1,45,87,404/- to Rs. 8,43,443/-. iii. In Para 4 of the order that 'The Applicant vide e-mails dated 30-9-2020 1-10-2020 ( Annex-3) informed that he had never requested for cancellation of the flat.. was also false. He also enclosed the email dated 21-1-2020 sent by Applicant No. 1 regarding the cancellation notice. iv. There was no intention of not passing the GST benefit to the flat holders. He had issued the letters dated 13-12-2017 to his flat holders in this regard including Applicant No. 1. v. NAA was also requested to kindly grant him a hearing through Video Conferencing so that he could put forth their case as well as answer the queries if any. 4. On receipt of the submissions dated 19-11-2020 of the Respondent this Authority, vide its Order dated 20-11-2020, called for clarifications thereon from the DGAP under Rule 133 (2A) of CGST Rules 2017. In response, the DGAP, vide his letter 16-12-2020, has submitted a point-wise reply to the above said submissions made by Respondent which are as below- a. The Respondent's main contention was that there seemed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e DGAP dated 16-12-2020, was forwarded by this Authority, to the Respondent and Applicant No. 1, inviting their submissions, if any. In response, the Respondent requested 7-10 more days to submit the comments on the clarifications dated 16-12-2020. However, Applicant No. 1 did not respond to the notice dated 24-12-2020. The Authority allowed the request for the additional time made by the Respondent and accordingly, vide its order dated 8-1-2021 asked the Respondent and Applicant No. 1 to submit their consolidated replies on the matter by 21-1-2021. In Response, the Respondent has reiterated his earlier submission and requested for hearing through video conferencing for any further explanation vide his email dated 20-1-2021. Applicant No. 1 has not filed any further submissions to date. 6. The proceedings in the matter could not be completed by the Authority due to lack of the required quorum of Members in the Authority during the period 29-4-2021 till 23-2-2022 and the minimum quorum was restored only w.e.f. 23-2-2022. The matter was taken up for further proceedings vide Order dated 23-2-2022. 7. On the specific request, a personal hearing in the present case was granted thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. The Authority finds that the computation of the amount of ITC benefit to be passed on by the Respondent to the eligible recipients works out to Rs. 1,45,87,404/-. The DGAP has calculated the amount of ITC benefit to be passed on to all the eligible recipients as Rs. 1,45,87,404/- based on the information supplied by the Respondent. Out of the said amount of profiteering, the benefit required to be passed on by the Respondent to the Applicant No. 1 is Rs. 86215/-. 10. The Authority finds that vide the submissions dated 19-1-2020 the Respondent has contended that there seemed to be mistakes in DGAP's report dated 28-10-2020. He has contended that the profiteered amount of Rs. 1,45,87,404/- arrived at by the DGAP is not correct and that it should be Rs. 8,43,443/-only. He had submitted a reworking of the Profiteered amount and the Comparative Statement along with a point-wise detailed explanation. In this regard, the Authority finds that the DGAP's report dated 28-10-2020 was based on the facts and data submitted by the Respondent himself. The DGAP has also reported that the Respondent had not filed his Service Tax Return from April 2016 to June 2017. Hence the contenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders that the Respondent shall reduce the prices to be realized from homebuyers/customers/recipients commensurate with the benefit of ITC received by him as has been detailed above. 15. Since the Respondent has profiteered in the instant project, there is every likelihood that he has profiteered in other projects also under GST No. 27AAECK9069N1ZQ. The Authority has reason to believe that the Respondent may have resorted to profiteering in the other projects also and hence, directs the DGAP under Rule 133(5) to investigate all the other projects of the Respondent under the same GST registration which have not yet been investigated from the perspective of section 171 of the CGST Act, 2017 and submit the complete investigation report for all the Projects under this single GST Registration. 16. The concerned jurisdictional CGST/SGST Commissioner is directed to ensure compliance of this Order. It may be ensured that the benefit of ITC i.e. the profiteered amount is passed on by the Respondent to each recipient of supply as mentioned in paragraph 13 above along with interest @18%, if not already passed on, from the date that such amount was profiteered till the date of return of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'ble Supreme Court, vide its Order dated 23-3-2020 in Cognizance For Extension of Limitation, In re [2020] 117 taxmann.com 66, while taking suo-moto cognizance of the situation arising on account of the Covid-19 pandemic, has extended the period of limitation prescribed under the 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 condonahle 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 10-1-2022 Cognizance for Extension of Limitation, In re 2022 (56) G.S.T.L. 385 (S.C.) = 2022 (379) E.L.T. 276 (S.C.) = [2022] 134 taxmann.com 307 (SC) has extended the period(s) of limitation till 28-2-2022 and the relevant portion of the said Order is as follows:- The Order dated 23-3-2020 is restored and in continuation of the subsequent Orders dated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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