TaxTMI 
TaxTMI 
2019 (5) TMI 1448
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....44,227/- as Service Tax on 10% of the basic sale price on the sale of a built up house located in "Eldeco Country" project launched by the Respondent in Sonipat, Haryana. It was also alleged that the said ready-to-move-in villa was sold at a base price of Rs. 98,28,312/- at the time of execution of the agreement on 15.07.2017, but the Respondent had charged GST on the base price of Rs. 98,28,312/- and the benefit of input tax credit was not passed on to the Applicant by way of commensurate reduction in price after implementation of GST w.e.f. 01.07.2017. 2. The application was examined by the Standing Committee on Anti-profiteering in its meeting held on 07.08.2018 & 08.08.2018, wherein it was decided, to refer the matter to the Directorate General of Anti-Profiteering (DGAP) to initiate detailed investigation in the matter. 3. The DGAP after completing the investigation has submitted his report under Rule 129 (6) of CGST Rules, 2017 on 28.11.2018 pertaining to the period w.e.f. 01.07.2017 to 31 08.2018. 4. The DGAP has stated that a notice under Rule 129 of the CGST Rules, 2017 was issued on 11.09.2018, calling upon the Respondent to reply as to whether he admitted that t....
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....he same shall be treated as supply of construction service liable to Service Tax/GST. 6. The DGAP in his Report has also stated that the Respondent claimed that in the present case he had received booking amount from the Applicant on 03.06.2017, i.e., in the pre-GST regime, while the Completion certificate was received on 15.07.2017 (under GST regime) and therefore the booking of villa which occurred in June, 2017 was much before the receipt of the Completion Certificate and hence he had charged applicable Service Tax & GST on the demands raised by him The Respondent has further stated that he had suo-moto determined the amount of benefit which had accrued post implementation of the GST and indicated the same in his letter dated 19.11.2018 as Rs. 21,12,400/- (i.e. 2% on amount paid during 01.07.2017 to 31.08.2018). 7. The DGAP on verification and completion of his investigation has also submitted that the Respondent had provided the payment schedule for the purchase of a Duplex Villa measuring 561.28 Sq. yards at the basic sale price of Rs. 17,520/- per square yard, and the details of amounts and taxes paid by the Applicant No. 1 to the Respondent are furnished in the Table b....
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....l be restricted to so much of the input tax as is attributable to the said taxable supplies including zero-rated supplies. Section 17(3) The value of exempt supply under sub-section (2) shall be such as may be prescribed, and shall include supplies on which the recipient is liable to pay tax on reverse charge basis, transactions in securities, sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building. 10. The DGAP has further argued that prior to 01.07.2017, i.e., in the pre-GST era, the Respondent was eligible to avail CENVAT credit of Service Tax paid on input services but the CENVAT credit of Central Excise duty paid on inputs and Value Added Tax (VAT) paid on inputs was not available. Post-GST, the Respondent was eligible to avail ITC of GST paid on inputs and input services including on the sub-contracts. The DGAP after taking into consideration the details of the ITC availed by the Respondent and his taxable turnover from the duly verified returns during the pre-GST period (April, 2016 to June, 2017) and the post-GST period (July, 2017 to August, 2018) has arrived at the following details as has been shown in the table below:- Tabl....
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....eriod A April,2016 to June, 2017 July, 2017 to August, 2018 2 Output tax rate (%) B 5.50% 12.00% 3 Ratio of CENVAT/ Input Tax Credit to Taxable Turnover as per Table - D above (%) C 0.61% 3.45% 4 Increase in tax rate post-GST (%) D=12% less 5.50% - 6.50% 5 Increase in input tax credit availed post-GST (%) E=3.46% less 0.61% - 2.84% 6 Analysis of Increase in input tax credit: 7 Base Price raised during July, 2017 to August, 2018 F 11,67,79,389 8 Other than Base Price raised during July, 2017 to August 2018 G 1,39,55,578 9 Total Taxable Value raised during July, 2017 to August, 2018 H=F+G 13,07,34,967 10 GST Collected @ 12% over Basic Price I=F*12% 1,40,13,527 11 GST Collected @ 18% over other than Basic Price J=G*18% 25, 12,004 12 Total GST Collected K=I+J 1,65,25,531 13 Total Demand collected L=H+K 14,72,60,498 14 Recalibrated Basic Price M=F*(1-E) or 97.16% of F 11,34,62,854 15 GST@12% N = M*12% ....
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.....12.2018 and 03.01.2019. The Respondent in his submissions has stated that while section 171 prescribed passing on the benefit of ITC by way of commensurate reduction in prices, there was no methodology prescribed to measure the benefit. He has further stated that being a compliant taxpayer he had calculated the benefit to be passed on to the customers. He has also submitted that he accepted the profiteered amount which had been calculated by the DGAP and assured to pass on the same to his customers. He also, requested that no penalty should be levied on him as he had volunteered agreed to pass on the benefit of ITC as per the provisions of the law. He has further submitted that with respect to payment of interest to the customers along with the profiteered amount, contracts for provision of services by him to the customers had not been closed yet and he was supposed to pass on the benefit on account of profiteering to the customers with adjustments in the final demand due from the customer. Therefore he requested not to impose any interest on the profiteered amount to be passed on. 15. The Respondent vide his submissions dated 1 1 02.2019 has suo-moto provided the following det....
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....me buyers during the post GST period, an amount of Rs. 41 82,198/- has been computed as the profiteered amount as per Annexure-15. The Respondent has raised no objection against the computation of the above amount made by the DGAP vide Annexure-15 and hence it can be relied upon. 19. The Respondent has also not denied the fact that there has been net benefit of ITC during the post GST period. His only contention was that there was no methodology in place to determine the profiteered amount and since the project was not complete he had suo-moto decided to pass on the benefit on completion of the project. However on receipt of the DGAP Report he had suo-moto accepted the profiteered amount of Rs. 38,99, 172/- which included both the profiteered amount @2.84% of the taxable amount and GST on the said profiteered amount @12% or 18% for the 124 home buyers and Rs. 2,83,026/- for the Applicant No. 1 which includes both the profiteered amount and the CST paid on the profiteered amount. Accordingly the Respondent has paid an amount of Rs. 41,82,198/- along with interest to all the 125 home buyers in the form of cheques which is taken on record. 20. Accordingly, as per the provisions ....