TaxTMI 
TaxTMI 
2019 (12) TMI 219
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....ant No. 1 to the Standing Committee on Anti-Profiteering under Rule 128 of the CGST Rules, 2017 on 30.10.2018. The Applicant No. 1 had stated in his application that the Respondent had resorted to profiteering in respect of supply of construction services related to purchase of Flat No. 31, GF, E-1, Premium Floor, Vatika Indian Next, Gurgaon 122004. The Applicant No. 1 had 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 said application was examined by Haryana State Screening Committee and upon being prima facie satisfied that the Respondent had contravened the provisions 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 30.10.2018. The said application was examined by the Standing Committee on Anti-Profiteering in its meeting held on 13.12.2018 and it had referred the application to the DGAP for investigation under Rule 129 (1) of the CGST Rules, 2017 to determine whether ....
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..../evidences on record. The main issues for determination were whether there was benefit of reduction in the rate of tax or the ITC on the supply of the construction service by the Respondent after implementation of the GST w.e.f. 01.07.2017 and if so, whether such benefit was passed on by the Respondent to the recipients, in terms of Section 171 of the CGST Act, 2017. 6. The DGAP in his Report has further stated that the Respondent had submitted a copy of the sale agreement dated 12.06.2012, for the sale of Flat No. 31, GF, E-1, to the Applicant No. 1 in his project "Vatika Premium Floors", measuring 1620 square feet, at the base price of Rs. 7,512/- per square feet. The details of amounts and taxes paid by the Applicant No. 1 to the Respondent, are furnished in Table-A' below:- Table- 'A' (Amount in Rs.) S.No. Payment Stages Due Date BSP Other Charges Service Tax including SBC & KKC GST GST on other charges Total 1. At the time of Booking 31-Oct-11 6,16,650 15,879 6,32,529 2. Within 60 days or Allotment (whichever is later) 15-Dec-11 12,33,300 31,757 &nb....
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.... STP Charges 06-Oct-17 11,520 1,382 12,902 25. TDS Recovered 03-Nov-17 26. Interest charges waiver 07-Dec-17 - 12,26,772 1,44,23,215 9,54,568 1,98,424 12,68,547 77,800 1,47,54,223 7. The DGAP in his Report has stated that another aspect to be borne in mind while determining profiteering was that Para 5 of Schedule-III of the Central Goods and Services Tax Act, 2017, defining activities or transactions which shall be treated neither as a supply of goods nor a supply of services reads as "Sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building". Further, clause (b) of Paragraph 5 of Schedule II of the Central Goods and Services Tax Act, 2017 reads as"(b) construction of a complex, building, civil structure or a pan 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 compete....
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....vail CENVAT credit of Service Tax paid on the input services only (no CENVAT credit was available in respect of Central Excise Duty and VAT paid on the inputs). However, post-GST, the Respondent could avail ITC of GST paid on all inputs and input services. From the data submitted by the Respondent, the details of the ITC availed by the Respondent, his turnover from the project "Vatika Premium Floors" and the ratio of ITC to the turnover during the pre-GST (April, 2016 to June, 2017) and post-GST (July, 2017 to December, 2018) periods, are furnished in Table-B' below:- Table-'B' (Amount in Rs.) S.No. Particulars April, 2016 to March, 2017 April, 2017 to June, 2017 Total (Pre-GST) July, 2017 to March, 2018 April, 2018 to December, 2018 Total (Post-GST) 1. CENVAT credit of Service Tax Paid on Input Services (A) 25,98,769 9,27,733 35,26,502 2. Credit of VAT on Inputs (B) 3. Total CENVAT/VAT Credit Available (C)= (A+B) 25,98,769 9,27,733 35,26,502 4. Input Tax Credit of GST (D) ....
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....tion in the case. On going through the submissions of the Applicant No. 1 vide e-mail dated 22.07.2019 and the Annexure-11 of the DGAP Report, it was observed that the Respondent had admitted his liability to pay the benefit of ITC to the flat buyers as has been mentioned in Table-C below:- Table-C S.No. Name of the Flat Buyer (S/Sh./Smt) Unit No. Amount of ITC Benefit passed on as per Section 171 of CGST Act, 2017 (Rs.) 1. Krishna 2nd Floor, 5, F-7, Vatika India Next, Gurugram, Premium Floors. 8.814 2. Munesh Chandra Tamang 2nd Floor, 2, H-7, Vatika India Next, Gurugram, Premium Floors. 16,903 3. Rajesh Kumar 2nd Floor, 17, F-1, Vatika India Next, Gurugram, Premium Floors. 4761 4. Mohd. Shahid 2nd Floor, 31, E-1, Vatika India Next, Gurugram, Premium Floors. 35190 5. Surinder Kumar Sindhwani Ground Floor, 4, E-3.1, Vatika India Next, Gurugram, Premium Floors. 6292 6. Sanjay Dewan (Applicant) Ground Floor, 31, E-1, Vatika India Next, Gurugram, Premium Floors. 112080 7. Dhirendra Pratap Singh 1st Floor, 12, G-5, Vatika India Next, Gurugram, Premium Floors. 4931 8. Ritesh Vij Gr....
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....31.12.2018 in respect of the project. b. The DGAP had required him to submit various information and documents. c. The DGAP in his Report had given negative findings on the allegation of profiteering made by the above Applicant. It was observed that he had neither benefitted from additional ITC nor there had been a reduction in the tax rate in the post-GST period. d. The Report of the DGAP gave findings in his favour that the provisions of Section 171 of the CGST Act, 2017 were not attracted in the present case. However, he had taken a commercial decision to provide benefits to customers on whom demand notes were raised in GST regime. The decision to provide benefit was completely a commercial decision and was not on account of his liability to provide benefit under Section 171 of the CGST Act, 2017. e. The deemed construction service as contemplated under the erstwhile Service Tax lax and extant GST law were in the nature of continuous supply. The time of supply of the deemed construction shall be the date on which invoice was required to be raised i.e. the time of reaching the milestones in terms of the Builder Buyer Agreement (BBA). f....
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.... benefit of the ITC. On the issue of reduction in the tax rate, it is apparent from the DGAP's Report that there has been no reduction in the rate of tax in the post GST period. Hence the only issue to be examined is as to whether there was any net benefit of ITC with the introduction of GST. On this issue, the DGAP in his Report, has stated that ITC as a percentage of the turnover which was available to the Respondent during the pre-GST period (April-2016 to June-2017) was 0.30% and during the post-GST period (July-2017 to December-2018), it was 0.20%. On this basis, the DGAP has concluded his Report with the findings that the Respondent had neither been benefited from additional ITC nor there had been a reduction in the tax rate in the post-GST period. We have no reason to differ from the Report of DGAP and we therefore agree with his findings since there was no reduction in the rate of tax nor there was increased additional benefit on account of ITC. Hence, the provisions of Section 171 of CGST Act, 2017 are not liable to be invoked in this case, notwithstanding the contention of the Applicant No. 1 that the Respondent had issued a credit note to him which indicated that an ....