AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (3) TMI 369
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....idabad, Haryana-121007. The above Applicant had alleged that the Respondent had not passed on the benefit of Input Tax Credit (ITC) to him by way of commensurate reduction in the price after implementation of the GST w.e.f. 01.07.2017 and charged CST on full amount of instalments. This Complaint was further referred to the Standing Committee on Anti-profiteering by the Screening Committee vide minutes of its meeting dated 20.06.2018 under Rule 128 of the above Rules. 2. The above Complaint was examined by the Standing Committee on Anti-profiteering in its meeting held on 07.08.2018 & 08.08.2018 and its minutes were forward to the DGAP for detailed investigation under Rule 129 (1) of the CGST Rules, 2017. 3. The DGAP on receipt of the above minutes had called upon the Respondent to submit reply as to the whether the ITC benefit was passed on by him to his recipients and also asked him to suo-moto determine the quantum of benefit which was not passed on. The Respondent had submitted replies vide letters dated 20.09.2018, 10.10.2018, 16.10.2018, 01.11.2018, 12.11.2018, 13.11.2018, 14.11.2018, 15.11.2018, 19.11.2018, 22.11.2018 and 26.11.2018 stating that he was in the business o....
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....ported in GSTR-3B with list of home buyers. (n) Details of unsold flats and unsold commercial shops. (o) Copies of contract and demand letters for new bookings made during the period August, 2018 to October, 2018 reflecting passing of 2% benefit of GST input credit to new allottees. (p) Details of Customer wise benefit passed on. 6. The DGAP in his report has submitted that as per the documents submitted by the Respondent, the payment schedule for the purchase of a flat measuring 618.24 square feet at the basic sale price of Rs. 4,000/- per square feet and the details of amounts and taxes paid by the Applicant No. 1 to the Respondent were as has been given below in the Table:- Table-'A' (Amount in Rs.) S. No. Payment Stage Due Date Basic % BSP Benefit Passed on Service Tax GST Total 1 Application for allotment (Date of Draw) 27.08.2015 5.00% 1,24,919 4,372 1,29,291 2 On allotment 11.09.2015 20.00% 4,99,674 17,489 5,17,163 3 Date of Draw+6 months 22.03.2016 12.50% 3,12,296 3,12,296 4 Date of Draw+....
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....mount in Rs.) S. No. Particulars April, 2016 to March, 2017 April, 2017 to June, 2017 Total (pre-GST) 01.07.2017 to 24.01.2018 25.01.2018 to 31.08.2018 Total (Post-GST) 1 CENVAT of Service Tax Paid on Input Services used for Commercial Shops A 19,06,672 1,49,961 20,56,633 2 Input Tax Credit of VAT Paid on Purchase of Inputs B 1,36,94,480 32,37,996 1,69,32,476 3 Total CENVAT/Input Tax credit Available (C) = (A+B) 1,56,01,152 33,87,957 1,89,89,109 4 Input Tax Credit of GST Availed (D) 2,03,84,595 1,40,08,003 3,43,92,598 5 Gross Taxable Turnover for VAT as per Annex-18 (E) 33,58,48,922 7,79,19,542 41,37,68,464 6 Abated Taxable Turnover reported in VAT Return (F) 18,74,58,580 4,34,91,837 23,09,50,417 7 Taxable Turnover for Service Tax on Commercial Shops (G) 2,02,16,792 30,09,744 2,32,26,536 8 Gross Taxable Turnover for GST (H) ....
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....e during the pre-GST and the post-GST period and the profiteered amount have been tabulated by the DGAP as per the Table given below:- Table C S. No Particulars Pre-GST Post-GST 1 Period A 01.04.2016 to 24.01.2018 01.07.2017 to 24.01.2018 25.01.2018 to 31.08.2018 Total 01.07.2017 to 31.08.2018 2 Output tax rate (%) B 5.25% 12.00% 8.00% 3 Ratio of CENVAT/Input Tax Credit to Taxable Turnover asper Table-B above (%) C 3.65% 6.49% 6.49% 6.49% 4 Increase in tax rate post-GST (%) D 6.75% 2.75% 5 Increase in input tax credit availed post-GST(%) E= 6.49% less 3.65% 2.84% 2.84% 2.84% Analysis of Increase in input tax credit: (Amount in Rs.) 6 Base Price collected during July, 2017 to August, 2018 F 20,63,35,174 27,05,32,230 47,68,67,404 7 GST Collected over Basis Price G= F*12% or 8% 2,47,60,221 2,16,42,578 4,64,02,799 8 Total Demand collected H=F+G 23,10,95,395 26,28,49,115 46,33,24,370 9 Recalibrated Basis Price I= F* (1-E) or 97.16% of F ....
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....e DGAP has also submitted that on the basis of the details of the outward supplies of the construction service submitted by the Respondent, it was observed that the service was supplied in the State of Haryana only. It is also stated by him that the Respondent had suo-moto passed on the benefit of ITC in the month of February, 2018, even prior to the filing of the complaint by the above Applicant. The Respondent had passed on the benefit of Rs. 1,11,33,581/- which had been duly verified from the data submitted by the Respondent. A summary of category-wise profiteering & the benefit passed on is given in the Table below:- Table D (Amount in Rs.) S. No. Category of Customers No. of Units Area (in sqf) Amount Received Post GST Profiteering Amt. as per Annex-21 Benefit Passed On by Respondent Difference Remark A B C D E F G H=F-G I 1 Applicant (Residential) 1 618 7,63,482 23,772 12,492 11,280 Further Benefit to be passed on as per Annex-22 2 Other Buyers (Residential) 650 3,07,425 40,32,91,960 1,25,35,181 70,71,541 54,63,640 Further Benefit to be passed on as per Annex-22 ....
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....icant and other recipients by the Respondent. He has further claimed that on this account, the Respondent had realized an additional amount of Rs. 23,772/- (Sr No. 1 of table- 'D' in para-19) from the above Applicant which included both the profiteered amount @2.84% of the taxable amount (base price) and GST on the said profiteered amount, however, the Respondent had suo-moto passed on Rs. 12,492/- as per the demand letter dated 10.02.2018 issued to the Applicant, and therefore, the Respondent had profiteered by an amount of Rs. 11,280/- (23,772/- (-) 12,492/-). Further, the Report has stated that the Respondent had also realized an additional amount of Rs. 57,65,329/- as mentioned at Sr. No. 2 & 7 of the Table- 'D' above which included both the profiteered amount @2.84% of the taxable amount (base price) and GST on the said profiteered amount from 663 other recipients who were not applicants in the present proceedings. The Report further admitted that these recipients were identifiable as per the documents on record as the Respondent had provided their names and addresses along with unit no. allotted to them, therefore, this additional amount of Rs. 57,65,329/- was....
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....letters have been issued to the effect that the ITC as per the DGAP's calculation is being credited into their ledgers. He has also intimated that if any further benefit of ITC would be available to him it would be passed on at the time of possession of the flats. It has also been submitted that he had instructed his bank to take necessary action and cheques will be released as and when the bank NOC is issued to the buyers or to the Respondent. 17. On 18.02.2019 the Respondent further submitted that in respect of 188 home buyers of residential units out of the total profiteered amount of Rs. 42,30,691 an amount of Rs. 18,19,582 was passed on and the balance amount of Rs. 24,11,109 along with interest of Rs. 2,03,716 (total Rs. 26,14,825) had been paid through cheques which were filed by him as evidence. He also promised to pay all the 13 buyers of commercial units the entire profiteered amount of Rs. 3,01,690. In respect of 177 home buyers the Respondent stated that since the balance instalments were pending from these buyers the profiteered amount for each one of them will be adjusted against their pending instalments. In this regard he also produced letters to the effect t....
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.... constructed 852 units out of which 816 are residential and 36 are commercial units. The total saleable carpet area is 3,96,950 sq. ft., out of which 3,81,640 sq. ft. is for the residential units while 15,310 sq. ft. is for the commercial units. Out of the 3,81,640 sq. ft. area of the residential units the Respondent has sold carpet area equivalent to 3,26,879.36 sq. ft. while out of 15,310 sq. ft. of the commercial units he has sold 6,294 sq. ft. For these sold units he has collected an amount of Rs. 46,73,82,690 on residential units and Rs. 94,84,715 on the commercial units thus a total amount of Rs. 47,68,67,405/ after introduction of GST has been collected by him 21. In the present case as has been noted by the DGAP the Respondent has availed benefit of additional ITC of 6.49% (post GST) as compared to 3.65% (pre-GST) as can be seen from the table given below. Based on the data and the documents filed by the Respondent, this percentage has been rightly arrived at by the DGAP by taking into account the benefit of credit available during pre GST (April 2016 to June 2017) to the taxable turnover received during the said period. Similarly for the post GST period (01 07.2017 to 3....
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....units which have been sold and consideration received. Out of these 751 home buyers the DGAP has admitted that for 100 buyers the entire profiteered amount has already been paid, Hence in respect of 651 units as has been shown in the table below the profiteered amount comes to Rs.1,45,59,184 which includes an amount of Rs. 23,772 for the Applicant No. 1 and Rs. 1,45,35,412 for all the other 650 home buyers. It has also been verified by the DGAP that in the case of the above Applicant, the Respondent has already paid an amount of Rs. 12,492, out of the profiteered amount of Rs. 23,772 hence the balance amount of Rs. 11,280 is to be paid. In the case of the balance 650 buyers, an amount of Rs. 70,71,541 has already been paid and balance amount of Rs. 54,63,640 is required to be paid. With regard to the commercial units only 13 units out of 36 units have been sold and an amount of Rs. 3,01,690 has been profiteered. Thus a total amount of Rs. 3,01,690 has to be paid to all the buyers of these commercial units. Accordingly out of total profiteered amount of Rs. 1,48,60,874 an amount of Rs. 90,84,264 has already been passed on as is evident from Annexure 17 of the DGAP's Report where....
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....incorrect tax invoices and hence he has committed an offence under section 122 (1) (i) of the CGST Act, 2017 and therefore, he is liable for imposition of penalty. Accordingly, a Show Cause Notice be issued to him directing him to explain why the penalty prescribed under Section 122 of the above Act read with rule 133 (3) (d) of the CGST Rules, 2017 should not be imposed on him. 26. Further the Authority as per Rule 136 of the COST Rules 2017 directs the Commissioners of CGST/SGST Haryana to monitor this order under the supervision of the DGAP by ensuring that the amount profiteered by the Respondent as ordered by the Authority is passed on to all the buyers. A report in compliance of this order shall be submitted to this Authority by the Commissioners CGST /SGST within a period of 3 months from the date or receipt of this order. 27. A copy each of this order be supplied to the Applicants, the Respondent, Commissioners CGST (SGST as well as Principal Secretary (Town & Planning) Government of Haryana for necessary action. File be consigned after completion. ============= Document 1 April, April, 01.07. 25.01.2 S. No Particulars 2016 2017 Total ....