TaxTMI 
TaxTMI 
2019 (11) TMI 1311
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....ion services related to purchase of an apartment in the project al "Navkar Darshan" of Flat No, 201, Navkar Darshan, Shridhar Nagar, Chinchwad, Pune-411033. The Applicant No. 1 also alleged that the Respondent had not passed on the benefit of Input Tax Credit (ITC) by way of commensurate reduction in the price of the apartment purchased by him, on implementation of GST w.e.f. 01. 07.2017,The aforesaid application was examined by Maharashtra State Screening Committee in its meeting and upon being prima facie satisfied that the Respondent had contravened the provision of Section 171 of the CGST Act 2017 forwarded the same with its recommendation to the Standing Committee on Anti-Profiteering for further action in terms of Rule 128 of the CGST Rules, 2017 on 16.08.2018. The said application was examined by the Standing Committee on Anti-Profiteering in its meeting held on 08.10,2018 and it had referred the application to the DGAP for investigation under Rule 129(1) of the CGST Rules, 2017 to determine whether the benefits of reduction in the rate of tax or ITC had been passed on by the Respondent to his recipients. 2. Thereafter, the DGAP issued a notice to the Respondent on ....
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....ent obtained the completion certificate of the project "Navkar Darshan" issued by the competent authority on 02.02.2018 and the ITC pertaining to the unsold flats as on 02.02.2018, was required to be reversed by the Respondent. The computation of the proportionate ITC pertaining to the unsold area which was required to be reversed by the Respondent is furnished in Table-A below:- Table - 'A' Particulars Factor Amount Total saleable Area of Flats (in Sq. mtr.) A 1,240.49 Area Sold before completion certificate is obtained (in sq. mtr.) B 964.67 Area sold before completion certificate is obtained (in Percentage) C=B/A 77.77% Area remaining unsold when completion certificate is obtained (in sq. mtr.) D=A-B 275.82 Area remaining unsold when completion certificate is obtained (in Percentage) E=D/A 22.23% ITC available for the period between July, 2017 till December, 2018 as per GSTR-3B (in Rs.) F 24,40,762 Proportionate ITC to be reversed (in Rs.) G=F*E 5,42,698 Input Tax Credit availed post GST pertaining to sold units (in Rs.) H=F-G 18,98,064 6. The DGAP in his Report has further stated that prior t....
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....was payable @ 4.5% and VAT @1% with those of the post-GST period when the effective GST rate on construction services was 12% (GST @18% along with 1/3^rd abatement on account of land value), vide Notification No 11/2017-Central Tax (Rate) dated 28.06.2017. The DGAP has further reported that on the basis of figures contained in Table-ST above, the comparative figures of the applicable tax rare and ratio of ITC to the turnover during the pre-GST & post-GST periods as well as the recalibrated basic price and the excess realization (Profiteering) during the post-GST period, are tabulated in the Table-'C' Table - 'C' (Amount in Rs.) S.No. Particulars Pre-GST Post-GST Period A April, 2016 to June, 2017 July, 2017 to December,2018 1. Tax Rate B 5.5% 12% 2. Ratio of CENVAT credit/Input Tax Credit to Turnover as per Table B above (%) C 0.14% 4.08% 3. Increase in input tax credit availed post-GST (%) D=4.08% less 0.14% - 3.94% Analysis of Increase in input tax credit 4. Basic Price collected during July, 2017 to December, 2018 E 1,32,....
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....2019 to 31.10.2018, whereas the Respondent had booked a total number of 15 flats till 31 12.2018. In respect of the remaining 11 flats, though the customers booked the flats on or before 31.12.2018, they had not paid any consideration during the post-GST period. If the ITC in respect of these 11 units was taken into account to calculate profiteering in respect of 4 units where payments had been received in the post-GST period, the ITC as a percentage of turnover would be distorted and erroneous. Therefore, the benefit of ITC in respect of these 11 units would have to be calculated when the consideration was received from the concerned home buyers, by taking into account the proportionate ITC in respect of such units. 11. Moreover, the DGAP has stated that post-GST, the benefit of additional ITC of 3.94% of the turnover had accrued to the Respondent for the said project and that this benefit would have been passed on to the recipients. Hence, Section 171 of the CGST Act, 2017 requiring that -any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices" had been con....
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....home buyers. b. Details of area sold and unsold in the subject project and details of redevelopment work undertaken. c. Turnover of area sold or redeveloped pre and post GST. d. Details of ITC availed pre and post GST implementation. e. ITC/Cenvat Register. f. Payment ledger in respect of payments received in respect of the subject projects. g. Details of all the projects undertaken along with the completion certificate. h. Redevelopment agreement between the builder and the society i. Evidence of Reversal of ITC Credit. The Respondent vide the above mentioned submissions has also stated that he had given the ITC benefit in the rate at the time of booking to the customers and also provided some extra work other than the plan and hence, there wasn't any liability against him. The Applicant No. 1 has never appeared for the hearing. However, vide e-mail dated 20,07.2019, he has stated that the Respondent had offered to pay Rs. 39,715/- against his demand of Rs,67,500/-. that the Respondent had made undue profit which he had admitted and hence, requested to direct the Respondent to pay him Rs. 67,500/- along....
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....benefit of ITC. He has also claimed that the benefit of ITC to be passed on to him was Rs. 67,500/- instead of Rs,39,715/- as mentioned in the DGAP's Report However, the Applicant No. 1 had not submitted any calculations or documentary evidence to substantiate his claim Therefore he is held entitled to Rs. 39,715/-. 18. Further, it has been revealed from the record that the Respondent has profiteered an amount of Rs. 5,83,593/- for the period of investigation. Therefore, in view of the above facts this Authority under Rule 133(3)(a) of the CGST Rules, 2017 orders that the Respondent shall reduce the price to be realized from the buyers of the flats commensurate with the benefit of ITC received by him as has been detailed above. The above amount of Rs. 5,83,593/- which includes 12% GST on the base profiteered amount of Rs. 5,21,066/- has been profiteered by the Respondent from the Applicant No. 1 and other flat buyers which is required to be refunded to the above Applicant No 1 and other flay buyers alongwith interest @18% from the date when the above amount was profiteered by him till the date of payment as per the provisions of Rule 133(3)(b) of the above Rules. The profite....