9911796707
TMI Blog2024 (8) TMI 1088X X X X Extracts X X X X X X X X Extracts X X X X ..... of all the customers submitted by the Respondent, it was found that there was no sale or even booking of the units in the above project during pre-GST regime. As far as rate reduction benefit is concerned, the Commission finds that after the implementation of the GST w.e.f. 01.07.2017, the Respondent was charging GST @ 8% with ITC. W.e.f. 01.04.2019, the Respondent was given the option either to charge GST @ 8% with ITC or 1% without ITC from the flat buyers vide Notification No. 03/2019-Central Tax (Rate) dated 29.03.2019. The Respondent continued to charge GST @ 8% with ITC instead of 1%without ITC from the flat buyers. Therefore, as the Respondent had continued to opt for an effective GST rate of 8% along with ITC, there was no benefit of reduced rate to be passed on to the flat buyers. The Commission observes that no benefit of reduction of rate or additional ITC during the GST period as compared to the pre-GST period has accrued in the case of this Project to the Respondent, which he is obliged to pass on to his buyers. Hence, the allegations made by the Applicant No. 1 are not tenable. The Commission finds that the provisions of Section 171 (1) of the CGST Act,2017 are not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 03.06.2023, 07.06.2023, 17.06.2023, 01.07.2023, 04.07.2023 and 28.07.2023. The detailed submissions of the Respondent were as under:- a) That the Respondent was a real estate developer, incorporated in December 2016, at F-104,Suyojan Apartment, Near Bhagvat Vidhyapith, Opp. Sai Baba Temple Sola, Ahmedabad-380060 with the main object of promoting real estate business through developing residential-cum-commercial complex. He was engaged in business of construction of residential-cum-commercial properties at Swastik heights, Behind Savya Skyz, Vaishnodevi to Zundal 200 ft Ring Road, Zundal, Ahmedabad - 382421. b) That there was only one project Swastik Heights and no other site/project c) That the Respondent got registered under the GST Act on 27.02.2018, so Tran-1 and Tran-2 was not applicable. d) That the firm got registered business after 01.07.2017 under the GST Act, so he had not filed the ST-3 or VAT returns for the period April, 2016 to June, 2017. e) That the Respondent had opted for the old regime as specified for item (ie) or (if), against serial number 3 in the table provided in the Notification No. 03/2019-Central Tax (Rate)dated 29.03.2019. f) That the GST Registrat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sale agreements of all the customers submitted by the Respondent, it was revealed that there was no sale or even booking of the units in the above project during pre-GST regime. From the copies of payment receipts submitted by the Respondent, the DGAP has found that the first payment was received on 19.05.2018 from the buyer of unit No.702 in the project. Also, the turnover of the Respondent was getting reflected in the GSTR-3B return from the month of May 2018 and onwards. viii. The DGAP has reported that Section 171 of the CGST Act,2017 comes into play in the event that there was a reduction in the rate of tax or there was an increase in the benefit of ITC. In the present case, the Applicant No. 1 had alleged that Respondent had not passed on any benefit of ITC till date which was received by him. He charged GST @ 8% on the base price of 25,00,000/-for the flat and promised to pass on the benefit of ITC at the time of booking of flat in Swastik Heights on 28.02.2019 but after he had received the ITC, he refused to pass on any benefit to the owner of flat. Respondent had opted to charge GST @ 8% from all the owners of the flat with benefit of ITC instead of opting for reduced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de his clarifications dated 10.10.2023 has submitted that during the investigation, the DGAP has found that the project commenced on 08.03.2018 which was much after the implementation of GST w.e.f. 01.07.2017. Hence, there was no pre-GST turnover or ITC that could be compared with the post-GST turnover and ITC to determine whether there was any benefit that was required to be passed on by way of reduced prices. Hence, Section 171 (1) of the Central Goods and Services Tax Act, 2017 is not applicable in the present case. 5. Vide CCI letter dated 20.03.2024, the present case was sent back to DGAP directing it to re-investigate 42 cases pertaining to real estate sector in view of Hon'ble Delhi High Court judgment dated 29.01.2024. The DGAP vide letter dated 14.06.2024 has informed that there were a total of 52 units in the Respondent's project Swastik Heights . The DGAP has enclosed the list containing unit-wise details of period of construction, period of booking and the position of each unit with respect to Para 128 (d) of the Hon'ble Delhi High Court's judgment dated 29.01.2024.Since the impugned project fell entirely in post-GST period, the instant case was covered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that after the implementation of the GST w.e.f. 01.07.2017, the Respondent was charging GST @ 8% with ITC. W.e.f. 01.04.2019, the Respondent was given the option either to charge GST @ 8% with ITC or 1% without ITC from the flat buyers vide Notification No. 03/2019-Central Tax (Rate) dated 29.03.2019. The Respondent continued to charge GST @ 8% with ITC instead of 1%without ITC from the flat buyers. Therefore, as the Respondent had continued to opt for an effective GST rate of 8% along with ITC, there was no benefit of reduced rate to be passed on to the flat buyers. 10. In view of the above facts, the Commission observes that no benefit of reduction of rate or additional ITC during the GST period as compared to the pre-GST period has accrued in the case of this Project to the Respondent, which he is obliged to pass on to his buyers. Hence, the allegations made by the Applicant No. 1 are not tenable. 11. Based on the above facts, the Commission finds that the provisions of Section 171 (1) of the CGST Act,2017 are not attracted in the Respondent's project Swastik Heights . Therefore, the proceedings in the present case are hereby dropped. 12. A copy of this order be sent to all ..... X X X X Extracts X X X X X X X X Extracts X X X X
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