Benefit of input tax credit to be passed on by commensurate reduction in prices - contravention of Section 171(1) of the CGST Act, 2017 requiring passing on of tax/ITC benefit - investigation under Rule 129 of the CGST Rules, 2017 and mandate to submit Report - methodology for determination of profiteered amount under Rule 126/Procedure & Methodology - non-withdrawability of complaint once taken up by Screening/Standing Committee and DGAP's duty to investigate - remedial payment to recipients with interest and recovery by Commissioner under Rule 133(3)(b) - penalty liability under Section 171(3A) of the CGST Act, 2017 for profiteeringReduction in the rate of tax - applicability of pre-GST and post-GST tax rates to construction service - There was no reduction in the rate of tax for the Respondent's construction service w.e.f. 01.07.2017; the rate increased from 6% to 18%. - HELD THAT: - The Authority examined the tax treatment of the supply and concluded that the applicable tax rate for the construction service increased from 6% (pre-GST service tax incidence on construction component) to 18% post-GST. Consequently, there was no entitlement to a benefit on account of reduction in rate of tax; the determinative question is whether additional ITC, not rate reduction, had accrued and required passing on. The finding that tax rate increased (and thus no reduction-based benefit arose) is recorded in the decision. [Paras 44]No reduction in rate of tax arose; the change was an increase from 6% to 18% and thus no commensurate reduction on that ground was required.Benefit of input tax credit - comparison of pre-GST CENVAT/ITC ratio and post-GST ITC ratio - methodology for determination of profiteered amount - The Respondent received a net additional benefit of input tax credit amounting to 5.36% of turnover for the period 01.07.2017 to 31.08.2018 which he was required to pass on to recipients. - HELD THAT: - On examination of returns, home buyer lists and area sold as supplied by the Respondent, DGAP computed the ratio of CENVAT/ITC to turnover as 1.08% for the pre GST period (April 2016-June 2017) and 6.44% for the post GST period (July 2017-Aug 2018). The Authority accepted the DGAP's case specific mathematical methodology as applied to the facts (area sold, instalments received and ITC availed) and held that the additional ITC benefit (6.44% - 1.08% = 5.36%) had accrued to the Respondent. Contentions based on prospective reversal on receipt of Completion Certificate, amendments to Rule 42/43 and alternative computations were rejected as not operative for the investigation period and/or factually unsupported. The Authority relied on figures filed by the Respondent in returns and home buyer lists to uphold DGAP's computation. [Paras 10, 11, 44]Respondent obtained additional ITC benefit equivalent to 5.36% of turnover for the investigation period and therefore was obliged to pass that benefit to eligible recipients.Contravention of Section 171(1) of the CGST Act, 2017 - remediation to eligible recipients with interest and recovery mechanism - penalty proceedings under Section 171(3A) - The Respondent contravened Section 171(1) by not passing on the additional ITC benefit; profiteered amount was determined and directions issued for refund with interest and initiation of penalty show cause proceedings. - HELD THAT: - Applying Section 171(1) and the Authority's notified Procedure & Methodology, the Authority held that the Respondent failed to pass on the computed additional ITC benefit and thus violated anti profiteering obligations. The profiteered amount for 01.07.2017-31.08.2018 was fixed at Rs. 1,01,50,590/-, of which Rs. 41,434/- was attributable to the applicant and the balance Rs. 1,01,09,156/- to other eligible buyers. The Respondent was directed to pay these amounts within three months with interest @18% from the date of realisation till payment, failing which recovery shall be effected by the Commissioners. Further, a show cause notice was ordered for penalty under Section 171(3A); earlier show cause notice proposing penalties under other provisions was withdrawn to that extent. [Paras 45, 46, 47]Contravention established; Respondent directed to remit determined amounts to eligible recipients with interest and to be issued show cause notice for penalty under Section 171(3A).Final Conclusion: The Authority accepted the DGAP's investigation for the period 01.07.2017 to 31.08.2018, held that the Respondent had received and retained an additional ITC benefit of 5.36% of turnover, determined the profiteered amount as Rs. 1,01,50,590/-, directed refund of Rs. 41,434/- to the applicant and Rs. 1,01,09,156/- to other eligible buyers with interest @18%, authorised recovery if not paid, and ordered issuance of a show cause notice for imposition of penalty under Section 171(3A) of the CGST Act, 2017.

Profiteering under Section 171 of the CGST Act, 2017 - passage of benefit of input tax credit by commensurate reduction in price - apportionment of input tax credit between sold and unsold units - computation of profiteered amount by comparison of ITC-to-turnover ratios - liability to pay interest on profiteered amount - penalty under Section 171(3A) of the CGST Act, 2017Reduction in effective GST rate on construction service - application of Notification reducing effective rate from 12% to 8% - Reduction in the rate of tax on the construction service rendered by the respondent with effect from 01.07.2017 and subsequent change on 25.01.2018. - HELD THAT: - The Authority accepted that the Central Government, on recommendation of the GST Council, levied GST effective at 12% on construction services from 01.07.2017 and that the effective rate for affordable housing was reduced to 8% by Notification dated 25.01.2018. The profiteering analysis was therefore conducted in two parts corresponding to the periods when the effective rates were 12% and 8% respectively, and the change in applicable tax rate was treated as a determinative factual and legal premise for computation of benefit to recipients. [Paras 46, 47]The Authority held that the tax rate on the respondent's construction service changed after 01.07.2017 (12% then reduced to 8% w.e.f. 25.01.2018) and proceeded to compute profiteering in two corresponding periods.Additional benefit of input tax credit - apportionment of ITC relevant to sold area - methodology of comparing ITC-to-turnover ratios - Existence and quantum of additional benefit of input tax credit available to the respondent during the post-GST period which was required to be passed on to buyers. - HELD THAT: - Relying on the respondent's returns and reconciled data, the DGAP computed ITC available and the ratio of ITC to turnover for the pre-GST period (April 2016 to June 2017) and the post-GST period (July 2017 to August 2018). The Authority accepted that the ITC-to-turnover ratio rose from 0.49% (pre-GST) to 7.73% (post-GST), resulting in an additional benefit of 7.24% of turnover. The Authority rejected the respondent's cost-based alternative computation as not supported by verified material and held that only ITC attributable to sold area/payments received in the post-GST period should be considered (unsold units excluded for present computation). [Paras 7, 8, 45, 46]The Authority found that an additional ITC benefit of 7.24% of turnover accrued to the respondent in the period 01.07.2017 to 31.08.2018 and that the ITC relevant to sold area/payments received post-GST alone was to be considered for passing on benefit.Contravention of Section 171 and relief to recipients - computation and restitution of profiteered amount with interest - show cause for penalty under Section 171(3A) - Whether the respondent contravened Section 171 by not passing on the additional ITC benefit, the amount of profiteering, and the consequential remedies and administrative directions. - HELD THAT: - On the basis of DGAP's verified computations and the accepted ITC-ratio methodology, the Authority determined the total profiteered amount for the investigation period to be Rs. 5,30,34,074/-, which includes GST on the base profiteered amount of Rs. 4,82,18,816/-. The Authority concluded that the respondent had not passed the additional ITC benefit to buyers and thereby contravened Section 171(1); accordingly, the amount was held to be repayable to eligible house buyers. The Authority ordered repayment of the profiteered amount to Applicants No.1-12 and other eligible buyers along with interest at 18% per annum from the date of realization until payment, to be complied with within three months, failing which recovery by the concerned Commissioner was directed. Further, the Authority found commission of an offence under Section 171(3A) and directed issuance of a show cause notice proposing penalty under that provision. Supervision and compliance reporting by DGAP/Commissioners was also directed. [Paras 47, 48, 49, 50, 51]The Authority held that the respondent violated Section 171, quantified profiteering at Rs. 5,30,34,074/-, directed refund with interest @18% within three months (failing which recovery by tax authorities), and ordered issuance of show cause notice proposing penalty under Section 171(3A); monitoring and compliance reporting were directed.Final Conclusion: The Authority accepted the DGAP's investigation and methodology, held that an additional ITC benefit of 7.24% accrued to the respondent for 01.07.2017 to 31.08.2018, determined total profiteering of Rs. 5,30,34,074/-, directed refund of that amount to eligible buyers with interest at 18% within three months (with recovery mechanisms if not complied with), and issued directions to initiate penalty proceedings under Section 171(3A); compliance to be monitored by the DGAP and Commissioners.

Passing on benefit of input tax credit by commensurate reduction in prices - Computation of profiteering using change in ratio of CENVAT/ITC to turnover - Authority and methodology under Section 171(2) and Rule 126 of CGST Rules - Inclusion of GST collected on excess realisation in profiteered amount - Interest on profiteered amount and mechanism for refund/adjustment - Requirement to issue show-cause for penalty under Section 171(3A)Passing on benefit of input tax credit by commensurate reduction in prices - Section 171(1) CGST Act - Whether the benefit of additional input tax credit accruing to the respondent after introduction of GST was required to be passed on to flat buyers by commensurate reduction in prices. - HELD THAT: - The Authority found that Section 171(1) mandates that any benefit of input tax credit must be passed on to recipients by way of commensurate reduction in prices and that the Anti-Profiteering Authority is constituted under Section 171(2) to examine compliance. The respondent could not appropriate ITC accruing post-GST and was obliged to pass the benefit to buyers. The Authority rejected the respondent's contention that passing on was optional, or that this would amount to impermissible price regulation; computation and enforcement do not direct retail pricing but ensure non-appropriation of state-conferred tax benefit by suppliers. (See findings and reasoning culminating in paras 60, 63, 66, 69 and 71-76.) [Paras 60, 63, 69, 71, 76]Benefit of additional ITC availed post-GST was required to be passed on to buyers by commensurate reduction in prices in terms of Section 171(1).Computation of profiteering using change in ratio of CENVAT/ITC to turnover - Mathematical methodology applied on case-specific facts - Whether the DGAP's methodology of computing the additional ITC (by comparing pre-GST and post-GST ratios of CENVAT/ITC to turnover) and deriving the profiteered amount was permissible and correctly applied in this case. - HELD THAT: - The Authority examined the DGAP's approach of computing the ratio of CENVAT/ITC to taxable turnover for the pre-GST period (April 2016-June 2017) and the post-GST investigation period (01.07.2017-30.06.2018), and treating the difference as the additional ITC to be passed on. It held that Rule 126 empowers the Authority to determine methodology, which must be applied case-by-case; no single uniform formula is mandated. The Authority accepted the methodology as correctly applied to the facts of this real-estate project, rejected respondent's objections that project lifecycle or absence of a legislative formula invalidated the computation, and treated the DGAP's original computation (additional benefit 3.51% based on ratio 5.27% v. 1.76%) as correct after reviewing revised submissions. (See paras 16-19, 42-46, 60-66, 82-84.) [Paras 16, 18, 42, 82, 84]The DGAP's case-specific mathematical methodology for computing additional ITC and profiteered amount by comparing pre- and post-GST ITC-to-turnover ratios was held permissible and correctly applied; the correct additional ITC percentage was taken as 3.51%.Inclusion of GST on excess realisation in profiteered amount - Rule 133(1) CGST Rules - Whether GST collected on the excess realisation (profit) must be included in the profiteered amount to be returned to buyers. - HELD THAT: - The Authority held that excess amount collected from buyers includes basic price as well as tax charged thereon and that the additional GST collected on the excessive realization must be treated as part of the profiteered amount. It rejected the respondent's contention that GST so collected had already been paid to the government and therefore should be excluded. The Authority reasoned that by collecting extra GST on excess realisation the buyers were deprived of the intended pass-through benefit, and therefore GST on that excess must be refunded/adjusted along with the base profiteered amount. (See paras 11, 19, 75.) [Paras 11, 19, 75]GST collected on excess realisation is included in the profiteered amount and must be returned/adjusted to buyers.Quantification of profiteered amount and beneficiary-wise allocation - Determination of amount to be passed back with interest - What was the quantum of profiteering for the investigation period and what relief should be directed? - HELD THAT: - On the basis of the accepted ITC differential of 3.51% and the DGAP's computations, the Authority determined the excess collection (profiteered amount) for the period 01.07.2017-30.06.2018 as Rs. 3,20,49,507/-, inclusive of GST, and identified the share attributable to the applicant buyer. The Authority noted the respondent had claimed to have passed some benefit but found the DGAP's verification of those claims incomplete except where DGAP had verified specific reductions for the applicant. Consequently, the Authority directed that Rs. 3,20,49,507/- be treated as the profiteered amount (with the applicant's portion adjusted to Rs. 15,336/- net as verified) and ordered passing the balance to identifiable buyers, with interest at 18% per annum from the date of collection until payment, to be effected within three months and monitored by Commissioners CGST/SGST. (See paras 18, 20, 46, 82-90.) [Paras 20, 46, 82, 89, 90]Profiteered amount for 01.07.2017-30.06.2018 determined as Rs. 3,20,49,507/- (inclusive of GST); respondent directed to pass identified amounts to eligible buyers with 18% p.a. interest within three months and compliance to be monitored by Commissioners CGST/SGST.Authority and validity of Rule 126: power to determine methodology - Delegation and constitutionality of Anti-Profiteering Authority - Whether the Authority and Rule 126 (delegation to determine methodology) are constitutionally valid and whether DGAP's investigation under those provisions was without law. - HELD THAT: - The Authority reviewed the statutory scheme: Section 171(2) empowers constitution of an Authority to examine passing on of tax benefits; Rule 126 empowers the Authority to determine procedure and methodology. The Authority held that the delegation is neither vague nor arbitrary, has been enacted following parliamentary sanction, and the investigatory machinery (Standing Committee, DGAP, etc.) is provided by the Rules. Accordingly, objections that lack of a legislative methodology rendered investigations unlawful were rejected. (See paras 60-66 and 61-66.) [Paras 60, 61, 66]Rule 126 and the Authority's power to determine methodology are valid; the DGAP's investigation under these provisions was lawful.Penalty show-cause under Section 171(3A) - Whether the respondent committed an offence under Section 171(3A) warranting initiation of penalty proceedings. - HELD THAT: - Having found that the respondent denied the benefit of ITC to buyers and profiteered, the Authority held that the respondent committed an offence under Section 171(3A) of the CGST Act. It therefore directed issuance of a show-cause notice to the respondent to explain why penalty under the relevant provisions should not be imposed; concurrently, an earlier notice proposing penalties under other sections was withdrawn to that extent. (See paras 91 and 58.) [Paras 58, 91]A show-cause notice for imposition of penalty under Section 171(3A) is to be issued to the respondent.Compliance monitoring by Commissioners CGST/SGST and timeline for refund - Interest on delayed payment of profiteered amount - What mechanism and timeline should be prescribed for ensuring passing of the profiteered amount to eligible buyers and reporting compliance? - HELD THAT: - The Authority directed that the respondent must pass the determined benefit to identifiable buyers within three months from the order date, along with interest at 18% per annum from the date of collection until payment. The Commissioners CGST/SGST Maharashtra were directed to monitor implementation under supervision of the DGAP and submit a compliance report within four months. If amounts are not passed, recovery is to be effected by concerned Commissioners as per CGST/SGST provisions. (See paras 89-92.) [Paras 89, 90, 92]Respondent to pass amounts with 18% interest within three months; Commissioners CGST/SGST to monitor and report compliance within four months; recovery mechanisms provided.Final Conclusion: The Authority held that the respondent had profiteered by not passing on additional ITC accruing after introduction of GST for the period 01.07.2017 to 30.06.2018, quantified the profiteered amount as Rs. 3,20,49,507/- (inclusive of GST), directed refund/adjustment of identified amounts (applicant's net entitlement verified), ordered payment with 18% p.a. interest within three months, directed monitoring by Commissioners CGST/SGST and ordered issuance of a show-cause notice for penalty under Section 171(3A).

Passage of benefit of tax reduction under Section 171 of the CGST Act, 2017 - profiteering - applicability of GST rate reduction versus existing exemption for printed books - classification and HSN declaration in invoices under Section 31 of the CGST Act, 2017Passage of benefit of tax reduction under Section 171 of the CGST Act, 2017 - profiteering - applicability of GST rate reduction versus existing exemption for printed books - No violation of Section 171 of the CGST Act, 2017 was made out against the respondent for alleged profiteering in respect of the book in question. - HELD THAT: - The Authority examined whether the benefit of a reduction in GST rate (from 12% to Nil w.e.f. 01.01.2019) had to be passed on by the respondent under Section 171. The invoices produced for supplies before and after 01.01.2019 show that the respondent did not charge GST on the base price in either transaction. The DGAP's classification observation and the question whether the product fell under a rate-reduced HSN were considered, but the determinative fact is that no GST was levied by the respondent both pre- and post-relevant date. Since Section 171 is engaged only where there is a reduction in rate of tax or an increase in input tax credit that requires passing on of benefit, and neither circumstance existed on the material before the Authority, the allegation of profiteering is not sustainable and the claim under Section 171 fails. [Paras 6, 7, 11, 13]Application alleging breach of Section 171 for non-passing of benefit dismissed; no profiteering established.Classification and HSN declaration in invoices under Section 31 of the CGST Act, 2017 - The invoices did not mention HSN classification, which is a violation requiring further examination by the Jurisdictional Commissioner. - HELD THAT: - Separately from the Section 171 determination, the Authority noted that the invoices for the supplies of the book do not contain HSN codes as required by Section 31 of the CGST Act. Irrespective of the Authority's finding on profiteering, the correctness of classification and the failure to disclose HSN on invoices raise compliance issues. The Authority refrained from adjudicating these consequences itself and directed that the Jurisdictional Commissioner examine this aspect and take further action as appropriate. [Paras 11, 12]Matter of invoice HSN classification and related non-compliance remitted to the Jurisdictional Commissioner for appropriate action.Final Conclusion: The Authority dismissed the application alleging non-passing of benefit under Section 171 as unsustainable because no GST was charged pre- or post-rate change; however, non-compliance for omission of HSN on invoices was noted and referred to the Jurisdictional Commissioner for further action.

Benefit of Input Tax Credit (ITC) - commensurate reduction in prices - profiteering under Section 171 of the CGST Act, 2017 - recalibration of base price - interest at eighteen percent per annum - imposition of penalty under Section 171(3A)Reduction in the rate of tax - effective GST rate change to 12% and subsequently to 8% - Reduction in the rate of tax on the construction service applied with effect from 01.07.2017 and the effective rate was reduced to 8% w.e.f. 25.01.2018. - HELD THAT: - The Authority accepted the DGAP's finding that the effective output tax rate applicable to the construction service post-GST implementation was 12% for the period 01.07.2017 to 24.01.2018 and was reduced to 8% w.e.f. 25.01.2018. This classification of the two post-GST sub-periods formed the basis for assessing any benefit arising from change in tax rates and/or availability of ITC and was applied in the DGAP's computations of recalibrated prices and alleged excess collections. [Paras 16, 29, 30]The change in effective GST rate as found by the DGAP is accepted and applied for the stated periods.Benefit of Input Tax Credit (ITC) - ratio of ITC to turnover - recalibration of base price - There was a net additional benefit of ITC to the Respondent amounting to 3.73% of turnover for the period 01.07.2017 to 31.08.2018. - HELD THAT: - On verification of the Respondent's GST returns, electronic credit ledger and project data, the DGAP computed ITC availed in the post-GST period and the turnover relevant to saleable carpet area, arriving at an ITC-to-turnover ratio of 3.73% post-GST as against 0% pre-GST. The Authority found the DGAP's methodology and calculations to be rational and acceptable and adopted the 3.73% figure as the net additional ITC benefit which required recalibration of the base price for determining commensurate reduction. [Paras 15, 16, 29]The DGAP's finding of an additional ITC benefit of 3.73% of turnover is accepted.Profiteering under Section 171 of the CGST Act, 2017 - commensurate reduction in prices - interest at eighteen percent per annum - imposition of penalty under Section 171(3A) - The Respondent contravened Section 171(1) by not passing on the additional ITC benefit; profiteering was quantified and remedial directions issued. - HELD THAT: - Applying the accepted 3.73% ITC benefit to the turnover on which demands/payments were received post-GST, the DGAP quantified excess collection (profiteering) for 493 units where post-GST demands/payments were made as Rs. 68,39,570 for the period 01.07.2017 to 31.08.2018 (inclusive of GST on the base profiteered amount). The Authority found the DGAP's computations and conclusions persuasive, noted the Respondent's admission and his issuance of credit notes, and directed reduction of prices, refund/adjustment of the profiteered amount to eligible buyers with interest at 18% p.a., and initiation of show-cause proceedings for penalty under Section 171(3A). Monitoring of compliance by the CGST/SGST Commissioner under DGAP supervision was also ordered. [Paras 21, 31, 32]The Respondent is held to have profiteered; he must reduce prices/return the profiteered amount with 18% interest to eligible buyers, credit notes issued are taken on record, and a show-cause notice for penalty shall be issued; compliance to be monitored by the Commissioners.Final Conclusion: The Authority upheld the DGAP's findings: the effective GST rates post-implementation and the additional ITC availability (3.73% of turnover) were accepted; the Respondent was held to have contravened Section 171(1) by not passing the ITC benefit, profiteering for 01.07.2017 to 31.08.2018 was quantified and the Respondent was ordered to reduce prices/return the profiteered amount to eligible buyers with interest at 18% p.a., show-cause proceedings for penalty under Section 171(3A) were directed, and implementation is to be monitored by the CGST/SGST Commissioner under DGAP supervision.

Benefit of input tax credit - commensurate reduction in prices under Section 171 - methodology for computation of profiteering based on proportionate ITC to turnover/area - reversal of input tax credit on unsold units and applicability of Rule 42/43 upon issuance of Completion Certificate - inclusion of tax collected in the profiteered amount - interested party / locus standi under Rule 128 and Explanation (c)Benefit of input tax credit - commensurate reduction in prices under Section 171 - Whether the Respondent contravened Section 171 of the CGST Act, 2017 by not passing on the benefit of additional ITC to home buyers. - HELD THAT: - The Authority accepted the DGAP's finding that the Respondent's relevant ITC as a percentage of turnover rose from 2.11% (pre GST) to 8.10% (post GST), yielding an additional benefit of 5.99% of turnover which ought to have been passed on by way of commensurate reduction in prices. The Authority rejected the Respondent's contentions that discounts offered were commercial adjustments or that GST collected and deposited with Government should be excluded; it held that by not reducing base prices commensurately and charging GST on the higher realisation the Respondent denied the intended benefit to buyers and thereby violated Section 171. The Authority found the Respondent liable to pass the computed profiteered amount to identifiable buyers and to face a show cause notice for penalty under the Act. [Paras 83, 86, 92, 102, 105]Contravention of Section 171 established; Respondent profiteered and is directed to pass the computed benefit to eligible buyers; show cause issued for penalty.Methodology for computation of profiteering based on proportionate ITC to turnover/area - Whether the DGAP's methodology - computing relevant ITC proportionate to sold area/turnover and deriving a 5.99% additional ITC benefit leading to a profiteered amount of Rs. 1,27,84,694 (inclusive of GST) for 01.07.2017 to 30.09.2018 - is correct. - HELD THAT: - The Authority examined competing computations advanced by the Applicant and the Respondent and upheld the DGAP's approach of taking ITC proportionate to the area sold relevant to turnover (Table E) for pre and post GST periods. The Authority found the DGAP's arithmetic and selection of relevant figures supported by returns and the Respondent's own data, and rejected alternative computations based on full ITC or retrospective application of reversal rules. Consequently, the profiteered amount of Rs. 1,27,84,694 (including GST on the base profiteered amount) for the investigation period was accepted as the interim determination. [Paras 69, 70, 82, 89, 102]DGAP's computation and methodology upheld; profiteered amount accepted as Rs. 1,27,84,694 for the period 01.07.2017 to 30.09.2018.Interested party / locus standi under Rule 128 and Explanation (c) - Whether the Applicant (buyer whose booking was later cancelled) had locus standi/was an 'interested party' to file the complaint. - HELD THAT: - The Authority noted that the complaint was filed on 18.07.2018 when the Applicant remained a recipient of the Respondent's supply; the Respondent cancelled the booking later on 24.11.2018. Under the Rules, a complainant in that position qualifies as an 'interested party' and is entitled to invoke anti profiteering proceedings. Accordingly, the Respondent's plea that the Applicant lacked locus standi was rejected. Separately, because the Applicant's booking was cancelled before the Authority's order, he was not entitled to the benefit ordered to other eligible buyers. [Paras 74, 88, 103]Applicant was an 'interested party' at the time of filing; however, having cancelled his booking before the order he is not entitled to the benefit directed to eligible buyers.Reversal of input tax credit on unsold units and applicability of Rule 42/43 upon issuance of Completion Certificate - Whether Rule 42/43 (and the Notification clarifying reversal methodology) applied for reversal of ITC in the present interim computation. - HELD THAT: - The Authority held that Sections 17(2)/(3) set out the basis for reversal but the detailed mechanism in Rules 42/43 applies on occurrence of the triggering event (issuance of Completion Certificate/first occupation). As the Respondent had not obtained the OC for the project during the investigation period, the reversal mechanism under Rule 42/43 could not be applied retrospectively to reduce the interim profiteering calculation. The Authority therefore rejected the Respondent's and Applicant's submissions seeking to apply the reversal rules to the interim period, noting that final reconciliation may occur on issuance of OC. [Paras 35, 82, 84, 97]Rule 42/43 mechanism for reversal not applicable for interim computation as OC not issued; final adjustment to be made at completion stage.Inclusion of tax collected in the profiteered amount - Whether GST collected from buyers on the excess realisation must be included in the profiteered amount. - HELD THAT: - The Authority rejected the Respondent's contention that GST amounts deposited with the Government cannot form part of profiteering. It reasoned that by charging GST on the inflated base price and not reducing the base price commensurately, the Respondent effectively denied buyers the benefit of additional ITC; inclusion of the tax collected on the excess realisation in the profiteered amount was therefore appropriate. The Authority held that such tax collected on the excess price is part of the amount to be refunded to eligible buyers. [Paras 92, 93]GST collected on the additional realisation is included in the profiteered amount and must be passed back to eligible buyers.Discounts offered by supplier and proof of passing ITC benefit - Whether discounts/adjustments claimed by the Respondent (aggregating to Rs. 1,11,61,090) constituted passing of the additional ITC benefit. - HELD THAT: - The Authority examined the Respondent's documentary trail and emails and concluded that the discounts were offered selectively and to offset price increases (e.g., on account of revised area/RERA) rather than being computed as passing on of ITC benefit. There was no ledger evidence or consistent methodology demonstrating that the discounts represented bona fide distribution of ITC benefit. Accordingly, the claimed discounts could not be set off against the profiteered amount for the interim period. [Paras 19, 86, 87, 102]Claimed discounts were not accepted as evidence of passing ITC benefit and cannot be set off against the profiteered amount.Final Conclusion: The Authority upheld the DGAP's investigation for the period 01.07.2017 to 30.09.2018, found that the Respondent profiteered by not passing the additional ITC benefit (computed at 5.99% of turnover), accepted the interim profiteered amount of Rs. 1,27,84,694 (inclusive of GST), directed the Respondent to pass this amount with interest to identifiable eligible buyers within three months, ordered monitoring by the Commissioners CGST/SGST, and issued a show cause notice for imposition of penalty; final reconciliation as to ITC reversal or further adjustments shall be undertaken at the time of issuance of the Completion Certificate.

Violation of Section 171(1) - failure to pass on benefit of input tax credit - Anti-profiteering - Penalty under Section 122(1)(i) not applicable to Section 171(1) violations - Non-retroactivity of penalty added by Finance Act, 2019 (Section 171(3A))Violation of Section 171(1) - failure to pass on benefit of input tax credit - Anti-profiteering - Respondent failed to pass on the benefit of input tax credit to buyers and thereby violated the provisions of Section 171(1) of the CGST Act, 2017. - HELD THAT: - The DGAP's investigation, as set out in his Report dated 25.02.2019, found that the respondent did not pass on the benefit of input tax credit to purchasers of flats in the 'Laurel Heights' project on introduction of GST w.e.f. 01.07.2017. This Authority had earlier considered that report and, by Order No. 38/2019 dated 14.06.2019, determined the profiteered amount for the period from 01.07.2017 to 31.08.2018 and held the respondent in violation of Section 171(1). On reconsideration of the material placed before it, the Authority reaffirms that the respondent denied the benefit of ITC to buyers for the stated period and thereby contravened the anti profiteering mandate of Section 171(1). [Paras 1, 2, 7]Respondent has violated Section 171(1) by not passing on the benefit of input tax credit for the period 01.07.2017 to 31.08.2018.Penalty under Section 122(1)(i) not applicable to Section 171(1) violations - Penalty under Section 122(1)(i) cannot be imposed for failure to pass on benefits under Section 171(1). - HELD THAT: - The Authority examined whether the penal provision in Section 122(1)(i), which deals with issuance of incorrect or false invoices and related offences, covers the failure to pass on benefits of tax reduction and input tax credit under Section 171(1). On construction of Section 122(1)(i) it was found that omission to pass on such benefits is not encompassed within that provision. Consequently, the notice issued to the respondent under Section 122(1)(i) for the alleged anti profiteering contravention could not be sustained. [Paras 8]Penalty under Section 122(1)(i) is not attracted to violations of Section 171(1) and therefore cannot be imposed for that violation.Non-retroactivity of penalty added by Finance Act, 2019 (Section 171(3A)) - The penal provision inserted as Section 171(3A) by the Finance Act, 2019 (effective 01.01.2020) cannot be applied retrospectively to penalise the respondent for conduct during 01.07.2017 to 31.08.2018. - HELD THAT: - The Finance Act, 2019 introduced a specific penalty for breach of Section 171(1) by inserting Section 171(3A) with effect from 01.01.2020. Since no specific penalty for contraventions of Section 171(1) existed during the period in which the respondent committed the violation (01.07.2017 to 31.08.2018), the newly enacted penal provision cannot be applied retrospectively. In view of the absence of an applicable penalty provision at the relevant time, the show cause notice dated 18.06.2019 seeking imposition of penalty is withdrawn and the penalty proceedings are dropped. [Paras 9, 10]Penalty under the post-enactment Section 171(3A) cannot be imposed retrospectively for the period 01.07.2017 to 31.08.2018; penalty proceedings are withdrawn and dropped.Final Conclusion: The Authority affirms that the respondent did not pass on the benefit of input tax credit and thus violated Section 171(1) for the period 01.07.2017 to 31.08.2018; however, no penal sanction could be sustained because Section 122(1)(i) does not cover such a violation and the specific penalty introduced later by Finance Act, 2019 (Section 171(3A)) is not retrospectively applicable, accordingly the penalty proceedings are withdrawn and dropped.

Section 171 of the Central Goods and Services Tax Act, 2017: benefit of input tax credit to be passed on by commensurate reduction in price - Determination of profiteering by comparison of ratio of input tax credit to taxable turnover - Refund/adjustment with interest under Rule 133(3)(b) of the CGST Rules, 2017 - Investigation of other projects and subsequent benefit post-occupancy certificate - Show Cause for penalty under Section 171(3A) of the CGST Act, 2017Section 171 of the Central Goods and Services Tax Act, 2017: benefit of input tax credit to be passed on by commensurate reduction in price - Determination of profiteering by comparison of ratio of input tax credit to taxable turnover - Whether the respondent obtained a net additional benefit of input tax credit post-GST and thereby profiteered in contravention of Section 171. - HELD THAT: - The Authority accepted the Director General of Anti Profiteering's computation which compared the ratio of input tax credit to taxable turnover in the pre GST period (April, 2016 to June, 2017) with the post GST period (01.07.2017 to 30.09.2018). That comparison showed an increase in available input tax credit from 4.31% to 8.15% of turnover, i.e. an additional benefit of 3.84% of turnover. Applying that percentage to the demands/receipts for residential units during the investigation period, the DGAP's calculations (as set out in Annex 13 to his report) of cumulative excess realisation were accepted. The Authority found no flaw in the methodology adopted in the facts of this case and affirmed the DGAP's arithmetic and approach on the data available during investigation. [Paras 16, 17]The respondent derived a net additional input tax credit of 3.84% of turnover and has profiteered; the profiteered amount for the period 01.07.2017 to 30.09.2018 is determined as Rs. 2,47,48,549/- (inclusive of applicable GST).Refund/adjustment with interest under Rule 133(3)(b) of the CGST Rules, 2017 - Show Cause for penalty under Section 171(3A) of the CGST Act, 2017 - Remedial measures and ancillary consequences upon finding of profiteering. - HELD THAT: - Having found contravention of Section 171, the Authority directed that the determined profiteered amount be returned/reduced from prices realised by the respondent and paid to the eligible recipients identified in the DGAP report. Interest at 18% is to be paid from the date of realisation until payment as provided by Rule 133(3)(b). The Authority also directed issuance of a show cause notice to the respondent proposing imposition of penalty under Section 171(3A). The Commissioners of CGST/SGST were directed to monitor implementation under Rule 136 and the DGAP was directed to submit a compliance report within three months. [Paras 18, 19, 22, 23]Respondent ordered to pass on/refund the profiteered amount with interest; show cause notice for penalty to be issued; supervisory and monitoring directions given to DGAP and Commissioners CGST/SGST.Investigation of other projects and subsequent benefit post-occupancy certificate - Determination of profiteering by comparison of ratio of input tax credit to taxable turnover - Whether further investigation/remand is required in respect of other projects or for periods beyond the present investigation. - HELD THAT: - The Authority found reason to believe that similar contraventions may exist in the respondent's other projects and directed the DGAP to investigate those projects as a new investigation in terms of Rule 133(5)(a) and (b). The Authority also clarified that the present investigation is limited to 01.07.2017 to 30.09.2018 and that profiteering for the period after 30.09.2018 has not been examined; any additional benefit of input tax credit accruing subsequently (including issues arising on issuance of the occupancy certificate and reversals) must be examined and passed on to buyers later, and the matter may be revisited after project completion. [Paras 13, 19, 21]DGAP directed to undertake fresh investigations into the respondent's other projects and to re examine and quantify any additional ITC benefit accruing after 30.09.2018 (including on issuance of occupancy certificate) in a subsequent investigation.Final Conclusion: The Authority upheld the DGAP's finding that the respondent contravened Section 171 by failing to pass on an additional input tax credit of 3.84% of turnover, fixed the profiteered amount at Rs. 2,47,48,549/- for the period 01.07.2017 to 30.09.2018, ordered refund/reduction with 18% interest to eligible buyers, directed issuance of a show cause notice for penalty, and mandated further investigations into other projects and for any benefit accruing after the investigation period.

Benefit of input tax credit - commensurate reduction in price - profiteering - recalibrated basic price - remedial relief to recipients including interest - penalty under Section 171(3A) - investigation under Rule 129/133/136 - scope of investigation-project phasesBenefit of input tax credit - commensurate reduction in price - profiteering - recalibrated basic price - Determination of profiteered amount due to net additional ITC post-GST and requirement to pass on that benefit to buyers. - HELD THAT: - The Authority accepted the DGAP's comparison of pre-GST and post-GST periods which showed input tax credit to turnover ratios of 2.37% (pre-GST) and 2.65% (post-GST), yielding an additional benefit of 0.28%. Applying this net benefit to receipts from buyers during 01.07.2017 to 31.10.2018, the DGAP recalibrated the basic price and tax to compute excess realization. The Authority recorded that the Respondent raised no objection to the computation and had agreed to pass on the computed benefit. Consequently the profiteered amount was determined as computed by the DGAP. [Paras 9, 10, 13, 14]Profiteered amount determined as per DGAP's computation (Rs. 2,13,468 as computed in the report) and Respondent liable to pass on this benefit to eligible buyers.Remedial relief to recipients including interest - monitoring and recovery by Commissioners - Mechanism and timeline for passing on the profiteered amount and supervision for compliance. - HELD THAT: - The Authority directed that the Applicant and other eligible buyers shall receive the computed ITC benefit (with specified apportionment between the Applicant and other buyers) along with interest at 18% from the date of realisation until payment. The amount is to be paid within three months from the date of the order, failing which the concerned Commissioner of SGST/CGST shall recover it with interest and pay it to the eligible buyers. The DGAP was directed to re-compute amounts for all eligible buyers and convey the same to the Respondent and the Commissioners. Further, the Commissioners of CGST/SGST Gujarat were directed to monitor compliance and report under supervisory control of the DGAP within four months. [Paras 15, 16, 19]Respondent to pay the computed benefit with interest within three months; DGAP to re-compute and Commissioners to monitor and report compliance within four months; recovery by Commissioners if payment is not made.Penalty under Section 171(3A) - offence of profiteering - Existence of an apparent offence under the Act and initiation of penalty proceedings. - HELD THAT: - The Authority found that the Respondent had denied the benefit of additional ITC to buyers in contravention of Section 171(1) of the CGST Act and thereby committed an offence under Section 171(3A). On that basis, the Authority directed issuance of a show cause notice asking the Respondent to explain why the penalty prescribed under Section 171(3A) read with Rule 133(3)(d) of the CGST Rules should not be imposed. [Paras 17]Show cause notice to be issued to the Respondent proposing penalty under Section 171(3A) read with Rule 133(3)(d).Investigation under Rule 129/133/136 - scope of investigation-project phases - Direction for further investigation into the entire project beyond the phase initially examined. - HELD THAT: - The Authority observed discrepancies between project particulars submitted and RERA records and noted that the DGAP's investigation appeared restricted to 'Phase-II' of the project. Given the Respondent's admission of liability to pass on the additional ITC and the possibility that other phases were not examined, the Authority, invoking Rule 133(5) of the CGST Rules, directed the DGAP to investigate passing on of additional ITC in respect of the whole project and submit a fresh report, treating such inquiry as a new investigation governed by Rule 129 procedures. [Paras 18]DGAP directed to conduct a fresh investigation into the entire project (all phases) and submit report under Rule 133(5)/Rule 129 procedures.Final Conclusion: The Authority determined that the Respondent benefited from additional input tax credit post-GST (net 0.28%) and fixed the profiteered amount as computed by the DGAP, directed that this amount (with interest) be passed to eligible buyers within three months, ordered DGAP to re-compute and Commissioners to monitor compliance, issued directions for a show cause notice proposing penalty proceedings, and remanded the matter to the DGAP for investigation of the entire project beyond the phase initially examined.

Passage of benefit of tax rate reduction - denial of Input Tax Credit as cost - computation of profiteering using ITC ratio - methodology of comparison of pre- and post-reduction prices - recalibration of base price by loading ITC loss - direction for deposit in Consumer Welfare Funds - penalty under Section 171(3A) of the CGST Act, 2017Passage of benefit of tax rate reduction - denial of Input Tax Credit as cost - Whether the Respondent passed on the benefit of GST rate reduction on sanitary napkins to recipients - HELD THAT: - The Authority found that sanitary napkins were subject to 12% GST with ITC prior to 27.07.2018 and were exempt (Nil) thereafter with denial of ITC. The DGAP estimated that ITC relevant to taxable turnover for the pre-reduction period was 8.39% and treated the loss of that ITC as an increase in the supplier's cost. Comparing recalibrated base prices (pre-reduction base prices loaded by 8.39%) with actual invoice-wise selling prices post 27.07.2018, the Authority observed that wherever actual selling prices exceeded recalibrated base prices the benefit of tax reduction was not passed to recipients. The Respondent's contentions that pre-reduction launch prices were inconclusive or that he had directed distributors to reduce MRPs were considered and rejected as inconsistent with the transaction values and documentary record. [Paras 7, 8, 9, 27, 28]The Respondent did not pass on the benefit of tax rate reduction to recipients; denial of ITC increased base price and benefit was not passed.Computation of profiteering using ITC ratio - recalibration of base price by loading ITC loss - methodology of comparison of pre- and post-reduction prices - Validity of DGAP's methodology and quantum of profiteering calculated - HELD THAT: - The Authority accepted DGAP's computation of the ITC ratio (8.39%) based on taxable turnover and relevant ITC (excluding reversal on closing stock) for July, 2017 to 26.07.2018. It upheld the method of increasing pre-reduction base prices by that ITC percentage to obtain commensurate post-reduction base prices and comparing those recalibrated prices with actual invoice-wise selling prices for the period w.e.f. 27.07.2018 to 30.11.2018. The Respondent's alternate averaging, distributor-wise comparison and adjustments for promo-pack procurement costs were considered and rejected on factual and methodological grounds, including inability to reliably match individual customers across periods and distinct nature/costs of promo packs not displacing the DGAP's approach. Consequently the profiteered amount as computed by DGAP was accepted. [Paras 7, 9, 10, 27, 30]DGAP's methodology validated and profiteered amount determined at Rs. 42,52,370/- for the decided period.Direction for deposit in Consumer Welfare Funds - Relief and monetary directions to be issued to the Respondent - HELD THAT: - Pursuant to the finding of profiteering, the Authority directed the Respondent to effect commensurate reduction in prices forthwith. It further directed deposit of the determined profiteered amount in the ratio of 50:50 into the Central and State Consumer Welfare Funds of Madhya Pradesh, along with interest at 18% until deposit, and entrusted the respective GST Commissioners with steps to ensure recovery if necessary, under statutory provisions and DGAP supervision. [Paras 31]Respondent directed to reduce prices and deposit the profiteered amount 50:50 into Central/State CWFs of Madhya Pradesh with 18% interest; authorities directed to ensure recovery.Penalty under Section 171(3A) of the CGST Act, 2017 - Initiation of penalty proceedings for profiteering offence - HELD THAT: - The Authority recorded that denial of the benefit of rate reduction amounted to profiteering under Section 171(1) and is an offence under Section 171(3A). On that basis the Authority directed issuance of a show cause notice to the Respondent to explain why penalty under Section 171(3A) read with Rule 133(3)(d) of the CGST Rules, 2017 should not be imposed. [Paras 32]Show cause notice ordered for imposition of penalty under Section 171(3A) read with Rule 133(3)(d).Final Conclusion: The Authority held that the Respondent failed to pass on the benefit of GST rate reduction on sanitary napkins; it validated DGAP's ITC-based methodology and fixed profiteering at Rs. 42,52,370/- for the period w.e.f. 27.07.2018 to 30.11.2018, directed commensurate price reduction and deposit of the amount 50:50 into the Central and State Consumer Welfare Funds of Madhya Pradesh with 18% interest, and ordered issuance of a show cause notice for penalty under Section 171(3A).

Section 171(1) of the CGST Act, 2017 - benefit of Input Tax Credit (ITC) - commensurate reduction in prices - anti profiteering obligation - methodology of ratio of CENVAT/ITC to turnover - periodic computation and passing on of ITC benefit - provision for reversal of ITC in respect of unsold unitsSection 171(1) of the CGST Act, 2017 - benefit of Input Tax Credit (ITC) - anti profiteering obligation - methodology of ratio of CENVAT/ITC to turnover - Whether the Respondent violated the obligation under Section 171(1) by not passing on the benefit of additional ITC to recipients - HELD THAT: - The Authority accepted the DGAP's finding that the Respondent availed higher aggregate input credit in the post GST period compared with the pre GST period and that the additional ITC must be passed to recipients by way of commensurate reduction in prices. The Authority held that Section 171(1) mandates comparison of ITC and sales realisations for pre and post GST periods to compute the benefit; cost of construction is irrelevant to that statutory obligation. Periodic assessment of the ITC benefit is required because ITC is availed month to month while projects have long gestation, and a supplier cannot defer passing on benefits until project completion while utilising the credit in business. The Authority rejected contentions based on market driven pricing, subcontractor apportionment and earlier VAT/Service Tax practices as not displacing the statutory duty to pass on additional ITC. [Paras 43, 44, 46, 48, 51]The Respondent contravened Section 171(1) by not passing on the additional ITC benefit; the methodology of comparing the ratio of CENVAT/ITC to turnover for pre and post GST periods is upheld.Methodology of ratio of CENVAT/ITC to turnover - quantification of profiteering - commensurate reduction in prices - interest under Rule 133(3)(b) - What is the quantum of profiteering and the relief to be ordered - HELD THAT: - Applying the accepted ratio methodology, the DGAP computed an increase in ITC benefit of 2.23% of taxable turnover (difference between post GST 6.55% and pre GST 4.32%). On the base of receipts from buyers during 01.07.2017-31.08.2018, the Authority adopted the DGAP's recalibration and found excess collection (profiteered amount) of Rs. 5,06,78,069 (inclusive of GST). The Authority excluded units sold after 01.07.2017 at negotiated all inclusive prices from the investigation scope (subject to the principle that agreements cannot oust Section 171 rights). The Respondent is directed to refund the identified amounts to the 1061 eligible recipients (including Rs. 58,450 in respect of the Applicant) with interest @18% p.a. from the dates of collection until payment, and to reduce future prices commensurate with the ITC benefit; compliance and monitoring are to be effected by the Commissioners CGST/SGST Karnataka under DGAP supervision. [Paras 23, 24, 49, 51, 52]Profiteering quantified at Rs. 5,06,78,069; Respondent directed to return Rs. 58,450 to Applicant and Rs. 5,06,19,619 to other eligible buyers with interest @18% and to reduce future prices commensurate with ITC benefit.Provisional reversal of ITC for unsold units on completion certificate - periodic computation and passing on of ITC benefit - Treatment of units where consideration was partly received pre GST or where instalments were not received during the investigation period - HELD THAT: - The Authority accepted the DGAP's approach that (a) units sold after 01.07.2017 at negotiated all inclusive prices were excluded from the current profiteering computation, and (b) for 243 units where payment was made in pre GST period but no instalments were received post GST during the investigation window, inclusion of their ITC would distort the ratio; accordingly, the Respondent is directed to compute and pass on the ITC benefit for those units when instalments are actually received, taking proportionate ITC into account. The Authority also noted that ITC in respect of unsold units may require reversal upon issuance of completion certificate under the statutory provisions, but that completion certificate has not been issued in this case. [Paras 23, 24, 48, 50]ITC benefit for 243 units remanded for computation when post GST instalments are received; units sold post 01.07.2017 at negotiated prices excluded from present calculation (subject to Section 171).Penalty under Section 171(3A) - show cause for imposition of penalty - Whether penalty proceedings should be initiated for contravention of Section 171 - HELD THAT: - Having found contravention of Section 171(1), the Authority held that the Respondent committed an offence under Section 171(3A). The Authority therefore directed issuance of a show cause notice to the Respondent to explain why penalty under Section 171(3A) read with Rule 133(3)(d) should not be imposed. [Paras 51, 53]Show cause notice to be issued to the Respondent for imposition of penalty under Section 171(3A).Final Conclusion: The Authority finds the Respondent guilty of contravening Section 171(1) by not passing on additional ITC benefit, quantifies profiteering at Rs. 5,06,78,069 for the period 01.07.2017 to 31.08.2018, directs refund with interest to 1061 eligible recipients and reduction of future prices commensurate with ITC benefit, remands computation for 243 specific units pending receipt of instalments, and directs issuance of a show cause notice for penalty under Section 171(3A).

Benefit of input tax credit and commensurate reduction in price under Section 171 - determination and quantification of profiteering under Rule 133 - definition of "profiteered" for failure to pass on ITC benefit - inclusion of tax collected on additional realisation in profiteered amount - interest on profiteered amount under Rule 133(3)(b) - direction to investigate other projects under Rule 133(5) - show cause for imposition of penalty for contravention of Section 171 - methodology for computation of ITC benefit as percentage of taxable turnoverBenefit of input tax credit and commensurate reduction in price under Section 171 - methodology for computation of ITC benefit as percentage of taxable turnover - inclusion of tax collected on additional realisation in profiteered amount - determination and quantification of profiteering under Rule 133 - Whether the Respondents failed to pass on the benefit of additional ITC to home buyers of Lodha Eternis for the period under investigation and the quantum of profiteering to be returned - HELD THAT: - The Authority accepted the DGAP's revised computation based on information and verifications provided by the Respondents and found the revised ratios of CENVAT/ITC to taxable turnover for the Pre GST and Post GST periods to be correctly determined on the material before it. Applying the increment in ITC (Post GST ratio less Pre GST ratio = 2.62%) to the net base price realized from customers during 01.07.2017 to 31.08.2018, and including the tax on the additional realisation, the Authority determined the profiteered amount. Discounts and ledger entries shown as 'discount' or as SGST/CGST credits issued by the Respondents were held not to constitute passing on of ITC benefit when they originated from the Respondents' profit margins and lacked evidence showing they represented ITC passthroughs. The Authority therefore accepted the DGAP's figure of profiteering after correcting a computational factor and held that benefit must be passed to the buyers with interest at 18% from the date of realisation until payment. The Respondents' objections on alternate methodologies, synchronization of credit and turnover, inclusion/exclusion of certain turnover items and increases in input costs were examined and rejected to the extent they negated the finding of additional ITC benefit requiring passthrough. [Paras 60, 61, 62, 70, 76]Profiteering established; total profiteered amount determined as Rs. 1,90,04,456/- (inclusive of tax) for the period 01.07.2017 to 31.08.2018; Applicant entitled to Rs. 37,065/- (inclusive of tax) and other eligible buyers to the remainder, all with interest @18% from date of realisation until payment; discounts and SGST/CGST credits shown by Respondents not accepted as ITC passthroughs.Definition of "profiteered" for failure to pass on ITC benefit - interest on profiteered amount under Rule 133(3)(b) - Entitlement to interest on the profiteered amounts and treatment of amounts passed as discounts or credits - HELD THAT: - The Authority applied Rule 133(3)(b) to direct payment of interest at 18% on the amounts found to have been profiteered, from the date each amount was realised until payment. It held that amounts represented in credit notes as 'discount' or as SGST/CGST credits issued from Respondents' profit margins are not equivalent to passing on the ITC benefit and therefore cannot be adjusted against the profiteered amount to be returned to eligible recipients. [Paras 61, 62, 70, 76]Interest @18% ordered on the profiteered amounts; discounts and SGST/CGST credits not to be set off against amounts payable as ITC benefit.Show cause for imposition of penalty for contravention of Section 171 - Whether action for penalty should be initiated for contravention of Section 171 - HELD THAT: - Having found contravention of the obligation to pass on additional ITC, the Authority concluded that the Respondents have committed an offence under the relevant provision and directed issuance of a Show Cause Notice to explain why penalty under the statutory provision should not be imposed. The direction to issue notice follows from the finding of profiteering and statutory scheme allowing penalty for such contravention. [Paras 78]Show Cause Notice to be issued to Respondents for imposition of penalty for contravention of the anti profiteering provisions.Direction to investigate other projects under Rule 133(5) - Whether further investigation is required into other projects admitted by the Respondents - HELD THAT: - The Respondents had admitted passing ITC benefit in respect of seventeen other projects. On that admission and the material before it, the Authority, invoking Rule 133(5), directed the DGAP to investigate those projects as a new inquiry and submit a report. The Authority recorded reasons to believe contravention may have occurred in respect of goods or services beyond the scope of the present report and required the DGAP to proceed accordingly. [Paras 79]DGAP directed to undertake fresh investigations into the seventeen other projects and submit report under Rule 133(5).Final Conclusion: The Authority held that the Respondents contravened the obligation to pass on additional ITC to buyers for the period 01.07.2017 to 31.08.2018, quantified the profiteering at Rs. 1,90,04,456/- (inclusive of tax) and ordered restitution to eligible buyers (Applicant to receive Rs. 37,065/- inclusive of tax) with interest @18% from date of realisation; discounts or SGST/CGST credits claimed by the Respondents were not allowed to be set off; a Show Cause Notice for penalty is to be issued; and the DGAP is directed to investigate admitted ITC passthrough claims in seventeen other projects under Rule 133(5).

Benefit of input tax credit (ITC) to be passed on under Section 171(1) of the CGST Act, 2017 - profiteering - reversal of ITC in respect of unsold units under Section 17(2) and Section 17(3) of the CGST Act, 2017 - computation of profiteered amount by applying the ratio of CENVAT/ITC to turnover - power to direct commensurate reduction in prices and refund with interest under Rule 133 of the CGST Rules, 2017 - initiation of show cause/penalty proceedings under Section 171(3A) of the CGST Act, 2017Benefit of input tax credit (ITC) to be passed on under Section 171(1) of the CGST Act, 2017 - computation of profiteered amount by applying the ratio of CENVAT/ITC to turnover - Whether the Respondent failed to pass on benefit of additional ITC to buyers and whether profiteering occurred; computation of the profiteered amount. - HELD THAT: - The Authority accepted the DGAP's project-wise computation of pre- and post-GST CENVAT/ITC ratios (pre-GST 2.06%; post-GST 4.48%), found an incremental ITC benefit of 2.42% applicable to payments/instalments falling due on or after 01.07.2017, and applied that ratio to the relevant base amounts collected/to be collected to arrive at the profiteered amount. The Authority rejected the Respondent's contention that discounts and entries in ledgers showed passing of ITC benefit because (a) certain discounts were given before ITC crystallised and were market-driven goodwill; and (b) ledger entries and discount narratives did not substantiate that the amounts were passed specifically as ITC benefit. The DGAP's adjustment for reversal of ITC on unsold area was accepted. On this basis the Authority determined the total profiteered amount as Rs. 3,69,26,963/-, including Rs. 15,231/- due to the Applicant and Rs. 3,69,11,732/- due to other specified recipients, and directed corresponding reliefs. [Paras 17, 68, 69, 85, 86]Profiteering established; profiteered amount determined as Rs. 3,69,26,963/- and directed to be passed on to identified recipients with interest; prices to be reduced commensurately.Reversal of ITC in respect of unsold units under Section 17(2) and Section 17(3) of the CGST Act, 2017 - Whether ITC reversal for unsold area at the time of Completion Certificate was correctly computed and to be applied in calculating usable ITC. - HELD THAT: - The DGAP computed proportionate reversal of ITC for the unsold area (13.52% of ITC available in the period) and reduced the post-GST ITC by that reversal when computing ITC attributable to sold units. The Respondent's alternative (slightly lower) reversal figure was unsupported by documentary evidence; the Authority accepted the DGAP's reversal computation and disallowed the Respondent's attempt to treat the reversal as part of excess benefit already passed to buyers. [Paras 13, 72, 74]DGAP's reversal of ITC on unsold area accepted and applied in computation of ITC available for passing on; Respondent's lesser figure rejected.Power to direct commensurate reduction in prices and refund with interest under Rule 133 of the CGST Rules, 2017 - Reliefs and directions to be issued to give effect to the Authority's determination of profiteering. - HELD THAT: - Relying on Rule 133, the Authority directed the Respondent to pass on Rs. 15,231/- to the Applicant and Rs. 3,69,11,732/- to the other buyers as listed in Annexure-18 of the DGAP report, to pay interest at 18% per annum from the dates when amounts were collected until payment, and to reduce future prices commensurate with the ITC benefit. The Authority also directed monitoring by the Commissioners CGST/SGST Uttar Pradesh under DGAP supervision and ordered a compliance report within four months. [Paras 85, 86, 88]Respondent directed to refund specified amounts with interest and to reduce prices commensurately; compliance to be monitored by tax authorities.Profiteering - initiation of show cause/penalty proceedings under Section 171(3A) of the CGST Act, 2017 - Whether the Respondent's contravention attracts penalty proceedings and what procedural step should follow. - HELD THAT: - Having found that the Respondent denied the benefit of additional ITC to buyers and thus resorted to profiteering contrary to Section 171(1), the Authority held that the facts prima facie constitute an offence under Section 171(3A) of the CGST Act, 2017 and that penalty proceedings are called for. Consequently, the Authority directed issuance of a Show Cause Notice requiring the Respondent to explain why penalty under Section 171(3A) read with Rule 133(3)(d) should not be imposed. [Paras 73, 87]Show Cause Notice to be issued to the Respondent proposing penalty under Section 171(3A); penalty proceedings to follow.Final Conclusion: The Authority accepted the DGAP's project-wise computations, held that the Respondent failed to pass on the additional ITC benefit post-GST and thereby profiteered; determined the profiteered amount at Rs. 3,69,26,963/-, ordered specified refunds with 18% p.a. interest and commensurate price reduction, directed monitoring by tax Commissioners, and ordered issuance of a Show Cause Notice for penalty under Section 171(3A) of the CGST Act, 2017.

Profiteering - pass on benefit of tax rate reduction - scope of Section 171 of the CGST Act, 2017 - classification of goods by size for applicable GST rateProfiteering - pass on benefit of tax rate reduction - classification of goods by size for applicable GST rate - scope of Section 171 of the CGST Act, 2017 - Whether the Respondent failed to pass on the benefit of the GST rate reduction to recipients in respect of the "HP V202b 19.5 inch Computer Monitor" for the investigation period - HELD THAT: - The Authority examined the notifications and classification of computer monitors by size and found that "Computer Monitors exceeding 17 inches but not exceeding 20 inches" had been attracting GST at 18% w.e.f. 22.07.2017, whereas the reduction effected w.e.f. 01.01.2019 applied only to monitors of size 20 inches to 32 inches. The product complained of, being a 19.5 inch monitor, was therefore already subject to GST @18% prior to 01.01.2019 and did not suffer any rate reduction on that date. As the anti-profiteering provisions under Section 171 can be invoked only where there is a reduction in the rate of tax or an additional benefit of input tax credit to be passed on, the core allegation that the Respondent had not passed on a rate reduction benefit for the 19.5 inch monitor during the relevant period was incorrect and unsustainable. The Respondent's documentary submissions showing consistent base price and charging of GST @18% further supported the finding of nil profiteering. [Paras 6, 7, 8, 10, 11]The allegation of profiteering in respect of the 19.5 inch monitor is dismissed as there was no reduction in the rate of tax for that product during the relevant period and Section 171 is not attracted.Final Conclusion: The application alleging non-passing of benefit of GST rate reduction in respect of the HP V202b 19.5 inch monitor is dismissed; the Authority finds nil profiteering as the product was already subject to the lower rate before 01.01.2019 and the conditions for invoking Section 171 of the CGST Act, 2017 are not satisfied.

Reduction in the rate of tax - benefit of input tax credit - anti-profiteering provisions - commensurate reduction in prices - Section 171(1) of the CGST Act, 2017Reduction in the rate of tax - anti-profiteering provisions - Whether there was reduction in the rate of tax on the construction services as alleged by the Applicant - HELD THAT: - The Authority found on the record that the Respondent charged GST in accordance with applicable notifications: 12% as per Notification No.11/2017 until 24.01.2018 and 8% w.e.f. 25.01.2018. The project and all material events relevant to allotment and agreement took place after 01.07.2017 (post-GST) and the Respondent subsequently exercised the option to continue with the then-applicable tax treatment for the project. Given that the project was not under execution in the pre-GST period, there was no pre-GST tax rate or price baseline against which a post-GST reduction could be measured to establish profiteering. On these facts the allegation of reduction in rate of tax giving rise to an obligation to pass on benefit was rejected. [Paras 17, 18, 21, 22]There was no actionable reduction in the rate of tax for the purposes of Section 171(1) as to attract anti-profiteering relief.Benefit of input tax credit - commensurate reduction in prices - anti-profiteering provisions - Whether there was benefit of additional input tax credit available to the Respondent which was not passed on to the Applicant - HELD THAT: - The Authority recorded that the Solera-2 project was initiated after GST came into force and there was no sale, booking or execution of the project in the pre-GST period. The Respondent swore by affidavit that no ITC was availed in the pre-GST period and first ITC was taken on 28.07.2017. Because there was no basis for comparison between pre- and post-GST availability of ITC for this project, no additional benefit of ITC to the Respondent was established. The Authority also considered the Applicant's contentions and press statements but held that those clarifications apply on the facts of each case and do not alter the finding that no additional ITC accrued to the Respondent in this matter. [Paras 16, 20, 21, 22]No additional benefit of input tax credit to the Respondent was established and therefore no obligation to pass on such benefit arose.Section 171(1) of the CGST Act, 2017 - anti-profiteering provisions - Whether the Respondent violated the provisions of Section 171(1) of the CGST Act, 2017 - HELD THAT: - Section 171(1) requires that either a reduction in rate of tax or the benefit of input tax credit be passed on to recipients by way of commensurate price reduction. The Authority held that neither element existed on the facts: there was no demonstrable reduction in rate applicable to a pre-GST baseline for this project, nor was there any additional ITC accruing to the Respondent that could be compared with pre-GST availability. The agreement expressly provided for GST to be borne by the Applicant and the Respondent had fixed price after accounting for tax and available ITC. Accordingly, the statutory requirement to pass on a tax-rate reduction or ITC benefit was not attracted. [Paras 22, 23]No contravention of Section 171(1) of the CGST Act, 2017 is made out; the application is dismissed.Final Conclusion: On the facts the Authority found that the project commenced post-GST, no pre- and post-GST comparison for tax rate or ITC was available, no additional ITC to the Respondent was established and no reduction in tax-rate obligation to be passed on arose; consequently, no violation of Section 171(1) of the CGST Act, 2017 was proved and the complaint is dismissed.

Passing on of the benefit of input tax credit - Section 171 of the CGST Act, 2017 - anti profiteering - time of supplySection 171 of the CGST Act, 2017 - passing on of the benefit of input tax credit - Whether the provisions of Section 171 were attracted and breached by the respondent by failing to pass on the benefit of input tax credit to the applicants. - HELD THAT: - The Authority accepted the DGAP's finding that the respondent had not availed any input tax credit in the post GST period and therefore no additional ITC benefit accrued to the respondent after implementation of GST. In the absence of any reduction in tax rate and in the absence of ITC having been availed post GST, there was no statutory basis under Section 171 to require passing on any benefit to recipients. The Authority further found on the material before it that the project concerned was completed prior to 01.07.2017 and that the respondent had neither availed ITC on inputs procured in the GST regime nor carried forward pre GST credit for stock as on 30.06.2017. Consequently Section 171(1) did not apply to the facts of this case and the allegation of contravention was unsustainable. [Paras 7, 13, 16]No contravention of Section 171 was established; the provision is not attracted.Anti profiteering - time of supply - Whether any quantum of profiteering was payable by the respondent to the applicants. - HELD THAT: - Because the Authority concluded that Section 171 was not attracted (no post GST ITC benefit and no reduction in tax rate), there was no basis to determine or quantify any profiteering. Allegations concerning recovery of GST from an earlier/allotted buyer and issues of double taxation were noted by the applicants, but the determinative finding on ITC and completion date rendered any claim for computation of profiteering inapplicable under the anti profiteering provisions. [Paras 11, 13, 15]No profiteering quantification arises; no amount is payable.Final Conclusion: The applications alleging non compliance with Section 171 of the CGST Act, 2017 are dismissed as the Authority found that the respondent did not avail input tax credit in the post GST period, the project was completed before 01.07.2017, and therefore the anti profiteering provisions are not attracted.

Pass on benefit of reduction in rate of tax by way of commensurate reduction in prices - Authority's mandate under Section 171 of the CGST Act, 2017 - denial of input tax credit (ITC) treated as cost and its impact on pricing - methodology for calculation of profiteering by comparing commensurate base price with actual selling price - deposit of profiteered amount in Central/State Consumer Welfare Fund with interest - incorrect invoices and penalty under Section 122(1)(i)Pass on benefit of reduction in rate of tax by way of commensurate reduction in prices - denial of input tax credit (ITC) treated as cost and its impact on pricing - methodology for calculation of profiteering by comparing commensurate base price with actual selling price - Whether Respondent No.1 failed to pass on the benefit of GST rate reduction on the product and profiteered - HELD THAT: - The Authority found that although MRP was reduced, invoice-level data showed an increase in the base price of the product post 27.07.2018 and the benefit of tax reduction did not reach recipients. DGAP computed the relevant ITC-to-turnover ratio (12.7%) after excluding ITC on closing stock and increased pre-reduction base prices by that ratio to arrive at commensurate post-reduction prices. Comparing these commensurate prices with actual invoice-wise selling prices for the period w.e.f. 27.07.2018 to 30.09.2018 established net higher realisation of Rs. 10,77,182.34. The Authority rejected Respondent's contentions that DGAP impermissibly fixed base prices or ignored negative variances, holding that benefit must be passed to all recipients and small per-unit differences cumulatively constitute profiteering. Consequently the Authority determined the quantum of profiteering, directed commensurate reduction in prices, and ordered deposit of the profiteered amount with interest into the Central/State Consumer Welfare Funds. [Paras 24, 26, 29, 30, 31]Profiteering of Rs. 10,77,182.34 established against Respondent No.1; directed to effect commensurate price reduction and deposit the amount with interest into Consumer Welfare Funds; compliance to be ensured by concerned Commissioners.Denial of input tax credit (ITC) treated as cost and its impact on pricing - Authority's mandate under Section 171 of the CGST Act, 2017 - Whether Respondent No.2 profiteered after the GST rate reduction - HELD THAT: - DGAP examined Respondent No.2's supplies and closing stock. For stock purchased prior to 27.07.2018, reversal of ITC on closing stock was treated as an extra cost; the excess realisation from sale of that stock during 27.07.2018-30.09.2018 was compared with the reversal amount. The reversal (cost) exceeded any excess realisation, and all closing stock was sold in the investigation period. On this basis the Authority concluded that Section 171(1) was not attracted in respect of Respondent No.2 and that profiteering was not established. [Paras 7, 13, 25]Application against Respondent No.2 dismissed; no profiteering established.Incorrect invoices and penalty under Section 122(1)(i) - Whether proceedings for penalty should be initiated against Respondent No.1 for issuing incorrect invoices - HELD THAT: - The Authority found that Respondent No.1 issued invoices showing altered base prices without specifying product particulars, with the apparent intention of avoiding passing on commensurate benefit. That conduct falls within the offence described in Section 122(1)(i) of the CGST Act, 2017. In the interest of natural justice the Authority directed issuance of a show-cause notice to Respondent No.1 before imposition of penalty under the Act and Rule 133(3)(d). [Paras 32]Notice to be issued to Respondent No.1 asking why penalty should not be imposed for issuing incorrect invoices; penalty proceedings to follow natural justice.Final Conclusion: The Authority held that Respondent No.1 did not pass the benefit of GST rate reduction to consumers and profiteered to the extent of Rs. 10,77,182.34, directing price correction and deposit of the amount with interest into Consumer Welfare Funds and initiation of penalty proceedings for incorrect invoicing; the complaint against Respondent No.2 was dismissed for lack of profiteering.

Non-passing of benefit of GST rate reduction under Section 171 of the CGST Act, 2017 - Transaction value as relevant value for determination of profiteering - Methodology of DGAP for computation of profiteering (averaging of transaction prices) - Deposit and distribution of determined profiteered amount and refund to complainant - Issuance of incorrect tax invoices and show-cause for penalty under Section 122(1)(i) of the CGST Act, 2017 - Appropriate investigatory period for determination of profiteeringNon-passing of benefit of GST rate reduction under Section 171 of the CGST Act, 2017 - Transaction value as relevant value for determination of profiteering - Respondent contravened Section 171 by not passing on the commensurate benefit of reduction in GST rate to recipients - HELD THAT: - The Authority found on available invoices that the Respondent increased the base price of the tiles from Rs. 750 to Rs. 814 when the GST rate was reduced from 28% to 18% w.e.f. 15.11.2017. The Authority accepted DGAP's approach that the relevant value for calculating profiteering is the transaction value (Section 15(1) of the CGST Act) and not MRP, particularly because supplies were made at prices substantially lower than MRP and the invoices lacked details of quality/size/brand to correlate MRP with transactions. In the absence of requisite purchase/supplier and comparable quality/size particulars from the Respondent, the Authority held that by increasing the base price post rate reduction the commensurate benefit was not passed to the consumers and thus Section 171 was breached. [Paras 6, 7, 33]Finding of contravention of Section 171 and acceptance that transaction value is the relevant value for determination of profiteeringMethodology of DGAP for computation of profiteering (averaging of transaction prices) - DGAP's methodology and computation of the profiteered amount are acceptable in the facts and circumstances of the case - HELD THAT: - The Respondent challenged DGAP's use of average transaction prices and inclusion of tax element in calculation. The Authority examined the objections and evidence and found that invoices produced by the Respondent did not disclose size/quality/texture/brand or supplier purchase data necessary to support the alternate methodology urged by the Respondent. Given the lack of comparable invoices and supporting documents from the Respondent, the Authority concluded that DGAP's averaging approach and inclusion of tax in the computation were appropriate for the available data and upheld the profiteering computation as per Annexure-15 of the DGAP report. [Paras 8, 14, 29, 34]DGAP's computation methodology upheld and objections rejected for lack of documentary basisAppropriate investigatory period for determination of profiteering - Selected investigatory period from 15.11.2017 to 30.06.2018 is acceptable - HELD THAT: - The Authority noted that DGAP's investigation pertained to the period starting with the effective date of the statutory rate change and extending to 30.06.2018. The Respondent's claim that the period was excessive was not supported by documentary evidence such as stock holding periods or manufacturer price revision periodicity. In absence of such material, the Authority found no reason to disturb the investigatory period chosen by DGAP. [Paras 4, 8, 34]Investigation period 15.11.2017 to 30.06.2018 acceptedDeposit and distribution of determined profiteered amount and refund to complainant - Directions for reduction of prices, refund to complainant, deposit of profiteered amount with interest, and distribution to Consumer Welfare Funds - HELD THAT: - Having determined profiteering, the Authority directed the Respondent to reduce prices in accordance with Rule 133(3)(a) of the CGST Rules, to deposit the total determined profiteered amount along with interest at 18% from the date of collection, and to refund the specific shortfall to the Applicant No.1 with 18% interest. As other recipients were not identifiable, the Authority directed equal distribution of the remaining profiteered amount between the Central Consumer Welfare Fund and the Uttar Pradesh State CWF under Rule 133(3)(c), to be deposited within three months, failing which recovery proceedings would follow under CGST/SGST law under DGAP supervision. [Paras 35]Respondent directed to reduce prices, refund Applicant No.1, deposit profiteered amount with interest and distribute amounts to CWFs as orderedIssuance of incorrect tax invoices and show-cause for penalty under Section 122(1)(i) of the CGST Act, 2017 - Respondent issued incorrect invoices; show-cause notice to be issued proposing penalty under Section 122(1)(i) - HELD THAT: - The Authority found that the Respondent had issued invoices that incorrectly reflected base prices and thereby compelled recipients to pay additional GST on increased prices. Such deliberate issuance of incorrect tax invoices was held to constitute an offence under Section 122(1)(i) of the CGST Act. As the Respondent had not yet replied on penalty, the Authority directed issuance of a notice seeking explanation why penalty should not be imposed, allowing natural justice before any penalty is finalized. [Paras 36]Show-cause notice to be issued to the Respondent proposing penalty under Section 122(1)(i); no penalty imposed without giving opportunity to replyFinal Conclusion: The Authority held that the Respondent contravened Section 171 by not passing on the GST rate reduction benefit, upheld DGAP's profiteering computation for the period 15.11.2017 to 30.06.2018 amounting to the figure determined in the report, directed price reduction, refund to the complainant with interest, deposit and distribution of the remaining profiteered amount with interest to the designated Consumer Welfare Funds within three months, and issued a show-cause notice proposing penalty under Section 122(1)(i) for issuance of incorrect invoices.

Passage of benefit of GST rate reduction - profiteering under Section 171 of the CGST Act, 2017 - computation and disgorgement of profiteering - direction to reduce price under Rule 133(3)(a) of the CGST Rules, 2017 - refund to affected recipient with interest - deposit into Consumer Welfare Fund - penalty for incorrect tax invoices under Section 122(1)(i) of the CGST Act, 2017Passage of benefit of GST rate reduction - profiteering under Section 171 of the CGST Act, 2017 - Whether the Respondent failed to pass on the benefit of reduction in GST rate on footwear (from 18% to 5% w.e.f. 27.07.2018) and thereby contravened Section 171 of the CGST Act, 2017. - HELD THAT: - The Authority found that Notification No. 18/2018-CT(Rate) dated 26.07.2018 reduced GST on footwear priced between Rs.500 and Rs.1,000 with effect from 27.07.2018. The Respondent increased the base price of the product (from Rs.592.37 to Rs.665.71 in the example) so that the MRP/price inclusive of tax remained unchanged after the rate reduction. By increasing the basic price and charging GST at the reduced rate on that inflated base, the Respondent did not pass on the benefit of tax reduction to recipients, thereby contravening Section 171 of the CGST Act, 2017. The Respondent admitted the lapse and offered to deposit the profiteered amount and refund to affected customers. [Paras 6, 7, 12, 13]Findings recorded that the Respondent denied the benefit of the GST rate reduction and thereby violated Section 171 of the CGST Act, 2017.Computation and disgorgement of profiteering - The quantum of profiteering attributable to the Respondent in the investigation period and the basis of its computation. - HELD THAT: - The DGAP examined invoices, price lists and outward sale registers and identified 1,451 items impacted by the rate reduction; after excluding items not sold prior to rate change and using pre-rate prices where available, profiteering was computed for 831 items. The DGAP's computation (annexed to the Report) arrived at a profiteered amount of Rs.6,55,307/- for those 831 products, which included Rs.77/- in respect of the Applicant No.1. The Authority accepted the DGAP's computation and the Respondent's concurrence to deposit the computed amount with interest. [Paras 8, 13, 15]The DGAP's computation of profiteering for 831 products (total Rs.6,55,307/- inclusive of Rs.77/- for Applicant No.1) is accepted and adopted.Direction to reduce price under Rule 133(3)(a) of the CGST Rules, 2017 - refund to affected recipient with interest - deposit into Consumer Welfare Fund - Relief and compliance directions to be issued to the Respondent in respect of the found profiteering. - HELD THAT: - Pursuant to the finding of profiteering, the Authority directed the Respondent to reduce prices by making commensurate reductions to reflect the tax-rate change as mandated by Rule 133(3)(a). The Authority directed refund of Rs.77/- to Applicant No.1 with interest at 18% from the date of receipt, and ordered deposit of the remaining profiteered amount (net of the refund) into the Central and concerned State Consumer Welfare Funds in the prescribed 50:50 ratio. The Respondent had already deposited amounts into the Central Fund, which the Authority took on record, and the Respondent was directed to pay interest at 18% on the deposited amount within three months. [Paras 14, 15]Respondent directed to reduce prices, refund Rs.77/- with interest to the Applicant, and to deposit the remaining computed profiteering into the Consumer Welfare Funds with interest, within specified timelines.Penalty for incorrect tax invoices under Section 122(1)(i) of the CGST Act, 2017 - Whether issuance of incorrect invoices by the Respondent constitutes an offence attracting penalty and the procedural step to be taken. - HELD THAT: - The Authority concluded that the Respondent issued incorrect invoices by not showing correct basic prices and thereby collected additional GST on inflated prices; this conduct amounts to an offence under Section 122(1)(i) of the CGST Act, 2017. As imposition of penalty was not finalized, the Authority recorded that the Respondent is liable for penalty under the said provision read with Rule 133(3)(d), and in the interest of natural justice directed that notice be issued to the Respondent to show cause why penalty should not be imposed. [Paras 16]Authority held that the issuance of incorrect invoices constituted an offence under Section 122(1)(i) and directed issuance of a show-cause notice to the Respondent for imposition of penalty (matter not finally adjudicated).Final Conclusion: The Authority found that the Respondent did not pass on the benefit of the GST rate reduction effective 27.07.2018 and thereby contravened Section 171; it accepted the DGAP's computation of profiteering (totaling Rs.6,55,307/-, including Rs.77/- for the Applicant), directed reduction of prices, refund of Rs.77/- with interest to the Applicant, deposit of the remaining profiteering into the Central and State Consumer Welfare Funds with interest, and ordered issuance of a show cause notice for penalty under Section 122(1)(i) of the CGST Act, 2017.

Anti-profiteering - commensurate reduction in price - determination of profiteered amount - deposit into Central and State Consumer Welfare Fund - reduction of GST rate without benefit of ITC - incorrect tax invoices and offence under Section 122(1)(i)Determination of profiteered amount - commensurate reduction in price - reduction of GST rate without benefit of ITC - Respondent profiteered by not passing on the benefit of GST rate reduction on sanitary napkins and the profiteered amount was determined. - HELD THAT: - The Authority accepted the DGAP's finding that the GST rate on the product was reduced from 12% to Nil w.e.f. 27.07.2018 without benefit of ITC and that the respondent had increased base prices notwithstanding the tax rate reduction. Taking the base purchase price, the denial of ITC effect and the established profit margin, the DGAP computed a commensurate price which was not charged. On the basis of the outward supply records and Annexure-15 of the DGAP's report, the Authority confirmed that supplies made after 27.07.2018 (including sales from closing stock as on 26.07.2018) were at prices above the commensurate price and adopted the DGAP's computation of the total profiteered amount. [Paras 13, 14]Profiteered amount determined at Rs. 5,282.51/- and respondent directed to make commensurate reduction in price as per Rule 133(3)(a) of the CGST Rules, 2017.Deposit into Central and State Consumer Welfare Fund - interest on profiteered amount - accounting of amounts already deposited - Respondent directed to deposit the determined profiteered amount with interest into the Central and Delhi State Consumer Welfare Fund and earlier payments were recorded for accounting. - HELD THAT: - The Authority, applying Rule 133(3)(c) of the CGST Rules, 2017, directed deposit of the determined profiteered amount along with interest at 18% into the Central and Delhi State Consumer Welfare Fund in the ratio of 50:50 since supplies were made in Delhi. The amount already paid by the respondent by demand draft and interest paid were taken on record and ordered to be apportioned equally between the two funds. [Paras 15, 16]Respondent directed to deposit Rs. 5,282.51/- with interest @18% into the Central and Delhi State Consumer Welfare Fund (50:50); earlier payment of Rs. 5,283/- and interest recorded and to be accounted 50:50.Incorrect tax invoices - offence under Section 122(1)(i) - show-cause for imposition of penalty - Respondent liable for penalty proceedings for issuing incorrect invoices; show-cause notice to be issued under Section 122 read with Rule 133(3)(d). - HELD THAT: - The Authority found from the record that the respondent issued incorrect tax invoices by not showing legally chargeable basic prices and by collecting additional GST on increased prices, thereby failing to pass on the benefit to recipients. Such conduct was held to fall within the offence specified under Section 122(1)(i) of the CGST Act, 2017. In the interest of natural justice, the Authority directed that a show-cause notice be issued to the respondent to explain why penalty should not be imposed as per the provisions referred to. [Paras 17]Notice to show-cause be issued to the respondent as to why penalty should not be imposed under Section 122(1)(i) of the CGST Act, 2017 read with Rule 133(3)(d) of the CGST Rules, 2017.Final Conclusion: The Authority confirmed that the respondent profiteered by not passing on the GST rate reduction on sanitary napkins and fixed the profiteered amount at Rs. 5,282.51/-, directed commensurate price reduction and deposit of the amount with interest into the Central and Delhi State Consumer Welfare Funds (50:50), recorded the payments already made, and ordered issuance of a show-cause notice for imposition of penalty for issuing incorrect invoices.