TaxTMI 
TaxTMI 
2019 (10) TMI 935
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....tion which was examined by the Standing Committee on Anti-Profiteering, in its meeting held on 08.10.2018, whereby it was decided to forward the same to the DGAP, to conduct a 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 24.04.2019 pertaining to the period w.e.f. 01.07.2017 to 31.10.2018. 4. The DGAP has stated that a notice under Rule 129 of the CGST Rules, 2017 was issued on 02.11.2018, calling upon the Respondent to reply as to whether he admitted that the benefit of ITC had not been passed on to the above Applicant by way of commensurate reduction in price and if so, to suo-moto determine the quantum thereof and indicate the same in his reply to the notice along with all supporting documents. The Respondent was also given an opportunity to inspect the non-confidential evidences/information furnished by the above Applicant which was not availed by him. 5. The DGAP in his Report has stated that the Respondent submitted that the flats booked by the above Applicant were still under construction and Occupancy Certificate of the said project was yet to be received by hi....
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....tion of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier". Thus, the DGAP has claimed that the input tax credit pertaining to units which were under construction but not sold was provisional which might be required to be reversed by the Respondent if such units remained unsold at the time of issue of occupancy certificate in terms of Section 17 (2) & Section 17 (3) of the Central Goods and Services Tax Act, 2017 which read as under: Section 17 (2) "Where the goods or services or both are used by the registered person partly for effecting taxable supplies including zero-rated supplies under this Act or under the Integrated Goods and Services Tax Act and partly for effecting exempt supplies under the said Acts, the amount of credit shall 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....
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.... 4,639.89 8. Relevant CENVAT/Input Tax Credit (H)=[(C) or D*(G)/(F)] 3,68,466 18,02,418 9. Ratio of CENVAT/Input Credit to Turnover [(I)=(H)/(E)]*100 2.37% 2.65% 9. The DGAP has concluded in his report that the input tax credit as a percentage of the total turnover that was available to the Respondent during the pre-GST period (April, 2016 to June, 2017) was 2.37% and during the post-GST period (July, 2017 to October, 2018), was 2.65% which confirmed that post-GST, the Respondent has benefited from additional input tax credit to the tune of 0.28% (2.65%-2.37%) of the total turnover. Further, the DGAP has stated that the profiteering has been examined by comparing the applicable tax and input tax credit available for the pre-GST period (April,2016 to June, 2017) when Service Tax @4.5% and VAT@I% was payable (total tax rate of 5.5%) with the post-GST period (July, 2017 to October, 2018) when the effective GST rate was 12% (GST @18% along with 1/3rd abatement on value) on construction service, which was fixed vide Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. On the basis of this the DGAP has s....
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.... However, during the course of the hearing of the case, the Respondent was called to furnish some additional documents vide Order dated 13.08.2019, which were received vide his submissions dated 11.09.2019. 12. In his submissions dated 11.09.2019; the Respondent submitted the following:- a) The year wise statement of ITC/CENVAT Credit availed and turnover as per the statutory returns for the period from 01.04.2016 to 31.12.2018. b) RERA Registration Certificate. c) List of payments received from each of the buyers and ITC benefits passed on, if any. d) The copy of balance sheet for the year 2016-17 and 2017-18. e) ITC Ledger for the period 01.04.2016 to 31.10.2018. f) Details of total number of units in the project with total area of each unit. g) Copy of the Land Agreement for the land purchased by the firm. 13. We have carefully considered the Report of the DGAP, the submissions of the Respondent and all the documents placed on record. From the perusal of the DGAP's Report it is revealed that the ratio of ITC to the taxable turnover during the pre-GST period was to the extent of 2.37% as compared to post-GST....
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....t passed on the above Applicant or any other buyer, he shall be at liberty to approach the State Screening Committee Gujarat for initiating fresh proceedings under Section 171 of the above Act against the Respondent. The concerned CGST or SGST Commissioner shall take necessary action to ensure that the benefit of additional ITC is passed on to the eligible house buyers in future. 17. It is also evident from the above narration of facts that the Respondent has denied benefit of ITC to the buyers of the flats being constructed by him in his "River View Heights Project" in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and has thus resorted to profiteering. Hence, he has committed an offence under section 171 (3A) of the CGST Act, 2017 and therefore, he is apparently liable for imposition of penalty under the provisions of the above Section. Accordingly, a Show Cause Notice be issued to him directing him to explain why the penalty prescribed under Section 171 (3A) of the above Act read with Rule 133 (3) (d) of the CGST Rules, 2017 should not be imposed on him. 18. On perusal of the DGAP Report dated 24.04.2019 and the annexures attached with it, it has ....