TaxTMI 
TaxTMI 
2019 (6) TMI 763
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....hat the Respondent had not passed on the benefit of Input Tax Credit (ITC) by way of commensurate reduction in the price, on introduction of GST w.e.f. 01.07.2017. The Karnataka State Screening Committee on Anti-profiteering on prima facie having satisfied itself that the Respondent had not passed on the benefit of ITC forwarded the said application with its recommendation, to the Standing Committee on Anti-profiteering on 04.07.2018 for further action, in terms of Rule 128 of the Rules. 2. The above reference was examined by the Standing Committee on Anti-profiteering and vide its minutes dated 08.08.2018 it had forwarded the same to the DGAP for detailed investigation. The application was forwarded to the DGAP along with the payment details as is given in the Table A below:- Table-A (Amount in Rs.) Particulars Basic Sale Price Other Charges Service Tax VAT GST Total Land Other than Land Agreement Value (A) 14,83,750 26,70,200 4,55,182 1.41,285 1,06,808 - 48,57,225 Paid in Pre-GST era (B) 12,61,188 22,69,670 - 1,23,732 90,786 - 37,45,376 Balance to be paid Post GST (C) = (A)-(B) 2,22,562 4,00,530 4,55,182 17,553 16,022 - 11,11,849 Demanded by th....
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....ther than Land 1 At the time of Booking 10.12.2014 1,30,000 66,702 - - 3,298 - 2,00,000 2 EMD 31.12.2014 1,66,750 4,67,338 - - 23,105 - 6,57,193 3 On or before completion of Basement Roof 11.05.2015 1,33,538 2,40,318 - - 11,881 - 3,85,737 4 On or before completion of 2nd floor Roof 17.09.2015 1,18,700 2,13,616 - - 11 ,963 - 3,44,279 5 On or before completion of 4nd floor Roof 23.10.2015 1,18,700 2,13,616 - - 11 ,963 - 3,44,279 6 On or before completion of 6nd floor Roof 22.11.2015 1,18,700 2,13,616 - - 11 ,963 - 3,44,279 7 On or before completion of 8nd floor Roof 19.12.2015 1,18,700 2,13,616 - - 12,390 - 3,44 706 8 On or before completion of 10nd floor Roof 21.01.2016 1,18,700 2,13,616 - - 12,390 - 3,44 706 9 On or before completion of 12nd floor Roof 16.02.2016 1,18,700 2,13,616 - - 12,390 - 3.44,706 10 On or before completion of 14nd floor Roof 15.03.2016 1,18,700 2,13,616 - - 12,390 - 3.44,706 11 On or Before completion of Flooring 13.03.2018 74,188 1,33,510 - - - 24,924 2,32,622 12 On or Before completion of Painting 74,188 1,33,510 - - 24,924 2,32,622 ....
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....documents submitted by the Respondent for the period April 2016 to August 2018 the ITC ratio to the total turnover for the project 'Laurel Heights' for the pre GST period (April 2016 to June 2017) and post GST period (July 2017 to August 2017) was arrived at by the DGAP. The report stated that the ITC ratio to the turnover during the pre GST period was 5.13% as compared to 7.79% during the post GST period as is given in the Table D below:- Table -D (Amount in Rs.) Sl. No. Particulars April, 2016 to March, 2017 April, 2017 to June, 2017 Total (Pre-GST) Balance Base price to be Collected as on 30.06.2017 from Existing Customers Agreement Value of Bookings made during 01.07.2017 to 07.03.2018 Total (Post-GST) 1 CENVAT of Service Tax Paid on Input Services (A) 1,12,67,630 27,16,478 1,39,84,108 - - - 2 Rebate of VAT on payments to registered contractors & sub-contractors in lieu of credit B 45,79,070 30.71,416 76,50,487 - - - 3 Total CENVAT/VAT Credit Available (E) = A+B 1,58,46,700 57,87,894 2,16,34,595 - - - 4 Input Tax Credit of GST as per Table-'C' (D) - - - - - 2,56,93,110 5 Total Turnover including JDsE 16,62,45,585 9,53,41,9....
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....p; 36,30,21,323 19 Excess Collection of Demand or Profiteering Amount R=L-Q 99,20,246 9. The DGAP in his report vide Annexure-16 has enclosed the details of 232 units with individual profiteered amounts and the total profiteered amount of Rs. 80,55,955/- which includes GST @12% on the base profiteered amount of Rs. 71 92,817/-. This amount also includes Rs. 18,563/- (base amount 16,574 + GST @12%) which is the profiteered amount in respect of the above Applicant. The report also submits that based on the joint developer's turnover as given in the GST returns the profiteered amount is arrived at Rs. 18,64,290/- which includes GST @18% on the base profiteered amount of Rs. 15,79,907/- and therefore the total profiteered amount in the present case has been arrived at Rs. 99,20,246/- which includes GST @12% or 18% on the base profiteered amount of Rs. 87,72,724/-. 10. The above report was considered by the Authority in its meeting held on 05.03.2019 and it was decided that the Applicants and the Respondent be asked to appear before the Authority on 26.03.2019. During the course of the hearing the Applicant No. 1 did not appear, the DGAP was represented by Sh. Bhupinder ....
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....5.28 5.52 Services 5.72 5% 3.11 2 61 Statutory approvals 4.05 4% 3.18 0.87 Admin. cost 3.45 3% 0.29 3.16 Based on the above data the Respondent submitted that 60% of the total project cost was towards sub-contract charges and claimed that the benefit of additional credits as required under Section 171 of the CGST Act, 2017 would accrue to the sub-contractors. He has also claimed that he had negotiated with his sub-contractors and the sub-contractors had agreed to pass on the benefit of Rs. 45,86,692/- to him, the details of which were enclosed as Annexure-I to his reply. He has further claimed that since 73% of the project was complete procurement and deployment of most of the goods and services was completed before the introduction of GST and only installation, completion and final finishing activities were to be completed post 30.06.2017. He has also claimed that since he was under composition scheme the only tax leviable was the Service Tax which was eligible for benefit of ITC. Since most of the goods and services were purchased prior to 01 07.2017 there was no additional benefit that had accrued to him after 01.07.2017. 14. The Respondent further referring to....
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.... has claimed that the methodology adopted in the case of Pyramid Infratech Pvt. Ltd. or in his case was incorrect and should not be adopted. However the Respondent has finally stated that based on his own methodology he has arrived at the benefit of ITC derived by him and accordingly has passed on the same to his customers with whom agreements were entered into on or before 30.06.2017. Based on his methodology Rs. 9/- per sq. ft. has been passed on to his customers and the details of the same were enclosed as Annexure-2 to his reply. 16. We have carefully considered all the reports filed by the DGAP, submissions of the Respondent and other material placed on record and find that the Applicant No. 1 had booked Flat No. 0702, Block- F on 23.03.2015 with the Respondent in his project 'Laurel Heights' measuring 1027 sq. ft. at the basic sale price of Rs. 3,085/- per sq. ft. The above project consisted of 434 flats (4,83,055 sq. ft.) of which 70.81% belonged to the Respondent and 29.19% belonged to the land owner. It is also admitted fact that 73% of the project was completed while 84% of the flats were sold and completion certificate was also obtained on 07.03.2018 17. The Respondent....
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....s court. It is made clear that this is only an interim arrangement and the court has not expressed any firm and final view". Accordingly the Respondent in the case of Pyramid Infratech Pvt. Ltd. had deposited the amount of Rs. 5,11,60 450/-. Therefore the Respondent's submission in this regard is totally baseless and devoid of any merit. 19. The third contention of the Respondent is that the total turnover, taxable turnover and the corresponding output tax are not comparable because the area sold will be different at different periods of time. This submission of the Respondent is irrelevant because the project has been completed and the completion certificate has also been received on 07.03.2018. Therefore the turnover on the sold flats, the ITC benefit as per returns and the details of unsold flats are all known and available as per the records filed by the Respondent himself. Therefore, the factors to determine the benefit of ITC have attained finality and hence the calculation of the profiteered amount by the DGAP is absolutely correct. 20. The Respondent has himself admitted that there has been benefit of ITC derived and the benefit has been passed on by him to all his....