TaxTMI 
TaxTMI 
2019 (12) TMI 273
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....a flat in the Respondent's project "Arawali Homes" situated at Sector-4, Sohna, Gurgaon, Haryana. The above applicant had alleged that the Respondent was collecting wrong GST post implementation of GST and was not refunding GST collected in the wrong manner, even after sending clarification that the GST was not applicable to "Affordable Housing", as the GST amount could be adjusted against the Input Tax Credit (ITC). 2. The above application was examined by the Standing Committee on Anti-profiteering in its meetings held on 07.08.2018 & 08.08.2018 and was forward to the DGAP for detailed investigation under Rule 129 (1) of the CGST Rules, 2017. 3. The DGAP on receipt of the above application had called upon the Respondent to submit reply as to the whether the ITC benefit was passed on to the recipients and also asked him to suo-moto determine the quantum of benefit which was not passed on. The Respondent as well as the above Applicant was afforded opportunity to inspect the evidence submitted by the other party however both of them did not avail the same. The Respondent had also not supplied the complete information sought by the DGAP hence summons were issued against him und....
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....stomers regarding passing on the GST ITC benefit. 6. DGAP has also submitted that the details of the amounts and the GST paid by the Applicant No. 1 for a flat measuring 467 sq. ft., at the basic sale price of Rs. 3,600/- per sq. ft. as per the Table-'A' below:- S.No. Payment Stage Due Date Basic% BSP GST Total 1. At the time of submission of the Application 07.10.2016 5.00% 86,500 - 83,560 2. Within fifteen days of the date of issuance of Allotment 18.10.2016 20.00% 3,46,240 - 3,46,240 3. Within six months from the date of issuance of Allotment letter 03.04.2017 12.50% 2,16,400 - 2,16,400 4. Within 12 months from the date of issuance of Allotment letter 15.09.2017 12.50% 216,400 25,968 242,368 5. Within 18 months from the date of issuance of Allotment letter 15.03.2018 12.50% 216,400 17,312 233,712 6. Within 24 months from the date of issuance of Allotment letter Not yet due as on 31.08.2018 12.50% 216,400 17,312 233,712 7. Within 30 months 12.50% 216,400 17,312 233,712 8. Within 36 months from the date of iss....
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....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". Therefore, the DGAP has further claimed that the ITC pertaining to the unsold units was outside the scope of this investigation and the Respondent was required to recalibrate the selling price of such units to be sold to the prospective buyers by considering the net benefit of additional ITC available to them post-GST. 8. The DGAP has also submitted that the Respondent has claimed in his letter dated 03.10.2018 that the Applicant No. 1 had been informed on 30.03.2018 that the benefit of ITC accruing to him if any, on account of introduction of GST, would be passed on to her. He has further submitted that copy of the letter issued to other customers, furnished by Respondent as a part of the letter dated 16.11.2018, showed that the Respondent had passed on an amount of Rs. 27,556/- (including 8% GST on ....
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....600 6. Total Saleable Carpet Area (Excluding Balcony Area) (F) 7,69,488 7,69,488 7. Total Sold Carpet Area (Excluding Balcony Area) (in SQF) relevant to turnover (G) 4,06,083 5,07,416 8. Relevant ITC [(H)= (D)*(G)/(F)] 35,35,588 5,13,77,097 Ratio of ITC to Turnover [(I)=(H)/(E)] 2.42% 10.70% The DGAP from Table-'B' has stated that it was clear that the ITC as a percentage of the turnover that was available to the Respondent during the pre-GST period from April, 2016 to June, 2017 was 2.42% and during the post-GST period from July, 2017 to August, 2018, it was 10.70% which clearly established that post-GST, the Respondent has benefited from additional ITC to the tune of 8.28% [10.70% (-) 2.42%] of the taxable turnover. 10. The DGAP has also stated that the Central Government, on the recommendation of the GST Council, had levied 18% GST with effective rate of 12% in view of 1/3rd abatement on value, on construction service vide Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. The effective GST rate on construction service in respect of the affordable and low-cost houses u....
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....ot contested that benefit of ITC would eventually have to be passed on to the recipients and the Respondent has claimed that he has passed on an amount of Rs. 27,5561- to the Applicant No. 1 which has been duly verified by the DGAP from the Applicant No. l's ledger account submitted by the Respondent. 11. The DGAP has also stated that on the basis of the aforesaid CENVAT/ITC availability pre and post-GST and the details of the amount collected by the Respondent from the Applicant and the other home buyers during the period from 01.07.2017 to 24.01.2018, the profiteered amount came to Rs. 1,74,24,547/- which includes 12% GST on the base profiteered amount of Rs. 1,55,57,631/- and the profiteered amount during the period from 25.01.2018 to 31.08.2018, came to Rs. 2,61,29,3801- which includes 8% GST on the base profiteered amount of Rs. 2,41,93,870/-. Therefore, the total profiteered amount during the period from 01.07.2017 to 31.08.2018 came to Rs. 4,35,53,927/- which includes GST @ 12% or 8% on the base profiteered amount of Rs. 3,97,51,502/-. The home buyer and Unit No. wise break-up of this amount has been given in Annex-20 of the Report dated 26.02.2019 furnished by the DGAP. ....
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....hat the Respondent has passed on benefit of Rs. 27,556/- to the Applicant No. 1 which has been duly verified by him and therefore, the Respondent has in fact profiteered by an amount of Rs. 11,863/- [39,419/-(-) 27,556/-] in respect of the above Applicant. The DGAP has further claimed that the Respondent has also realized an additional amount of Rs. 4,35,14,508/- which includes both the profiteered amount @ 8.28% of the base price and GST on the said profiteered amount, from other recipients as well who were not Applicants in the present proceedings. These recipients were identifiable as per the documents provided by the Respondent, giving the names and addresses along with the Unit No. allotted to each recipient. The DGAP has also stated that the Respondent has passed on Rs. 2,52,35,523/- as benefit of ITC to his customers and therefore, the Respondent has profiteered by an amount of Rs. 1,82,78,985/- [4,35,14,508/- (-) 2,52,35,523/-] and this additional amount of Rs. 1,82,78,985/- was required to be returned to these eligible recipients. The DGAP has further stated that the present investigation covered the period from 01.07.2017 to 31.08.2018 and hence, profiteering, if any, for....
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....it of ITC available under the GST regime which was not available earlier then that benefit has to be passed on to the customers by way of reduction in prices. VI. That under the pre-CGST regime vide Notification No. 09/2016 dated 01.03.2016 the Service Tax was exempted in the case of construction of residential complex under the affordable housing schemes and accordingly the CENVAT credit for input services was not available to him. In the case of Haryana VAT Act, 2003, as the Respondent had opted for the regular scheme to discharge his VAT liabilities on transfer of goods during the execution of the construction activities therefore, the VAT input credit was allowed to him. VII. That only the credit of Central Excise Duty on materials was not allowed to him and was cost to him in the erstwhile regime. VIII. That only this component of Central Excise Duty was the additional ITC available to him in the GST regime which he was ready to pass on to his customers subject to adjustment of any ITC which would be cost to him at the time of completion of the project. IX. That the Respondent has also provided the break-up of total ITC of Rs. 7,79,12,520/- ....
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....he pre-GST period from April, 2016 to June, 2017 to the taxable turnover received during the above period the ratio of ITC to turnover has been computed by the DGAP as 2.42% of the turnover as per Table-B supra. Similarly, the above ratio has been calculated as 10.70% for the post-GST period from 01.07.2017 to 31.08.2018. Accordingly, the DGAP has claimed that the Respondent has benefited to the tune of 8.28% of the turnover which he is required to pass on to his buyers. The above ratios of ITC to turnover have been arrived at by the DGAP on the basis of the information supplied by the Respondent which has been duly verified by the DGAP and hence the above ratios can be relied upon. The Respondent has not disputed the above ratios and has instead agreed to pass on the benefit of ITC which has been calculated on the basis of the above Ratios vide his submissions dated 06.06.2019. 19. Based on the above facts this Authority determines the profiteered amount as Rs. 4,35,53,927/- (inclusive of applicable GST @ 12% or 8%) for the 1075 residential units for the period from 01.07.2017 to 31.08.2018 as per the details furnished by the DGAP vide Annexure-20 of his above Report. The above....