AI Drafter 
TaxTMI 
TaxTMI 
2020 (6) TMI 248
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....x Credit (ITC) by way of commensurate reduction in the price of the apartment purchased by him. 2. The said application was examined by the Haryana State Screening Committee on Anti-Profiteering in its meeting held on 03.04.2019 and it observed extra charging of GST by the Respondent in terms of Section 171 of the CGST Act and had forwarded the said application with its recommendation to the Standing Committee on Anti-profiteering for further action, as per the provisions of Rule 128 of the CGST Rules, 2017. 3. The Standing Committee on Anti-profiteering examined the aforesaid application in its meeting held on 15.05.2019 and it was decided to forward the same to the DGAP for detailed investigation under Rule 129 (1) of the CGST Rules, 2017 to examine whether the benefit of reduction in the rate of tax or ITC had been passed on by the Respondent to his recipients. The DGAP had received the minutes of the meeting of the Standing Committee on Anti-Profiteering on 27.06.2019. 4. Thereafter, the DGAP had issued a notice to the Respondent on 09.07.2019 (Annex-2) under Rule 129 (3) of the above Rules, calling upon the Respondent to reply as to whether he admitted that the benefi....
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....he location of the Apartment. 6. Vide the aforementioned letters/e-mails, the Respondent also submitted:- (a) Copies of GSTR-1 & GSTR-3B Returns for the period July, 2017 to June, 2019. (b) Copies of ST-3 Returns for the period April, 2016 to June, 2017. (c) Copies of all demand letters issued and sale agreement made with the Applicant. (d) Copy of Balance Sheet for FY 2016-17 and 2017-18. (e) Electronic Credit Ledger for the period 01.07.2017 to 31.03.2019. (f) List of home buyers in the project "Hero Homes". (g) Copy of Project report submitted to the RERA. (h) Tran-1 for the period July, 2017 to December, 2017. (i) Details of applicable tax rates, pre-GST and post-GST. (j) Copy of the first invoice raised with the projection construction cost dated 30.03.2019. 7. The DGAP has reported that he has carefully examined the various replies of the Respondent and the documents/evidence placed on record. The main issues for determination were whether the Respondent had benefited from the reduction in the rate of tax or the ITC after implementation of the GST on the supply of the construction ....
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.... 14/2015-ST dated 19.05.2015). After implementation of GST w.e.f. 01.07.2017, GST on construction service was chargeable @ 18% (effective rate was 12% in view of 1/3rd abatement on value) on construction service vide Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 and the effective GST rate on construction service in respect of affordable and low-cost houses upto a carpet area of 60 square metres was further reduced to 12% GST (effective rate was 8% in view of 1/3rd abatement on value), vide Notification No. 1/2018-Central Tax (Rate) dated 25.01.2018. Thus, the DGAP has observed that in the case of construction service the effective rate of tax (@ 4.5%) in the Pre-GST era was lower than the effective rate of tax @ 8% or 12% as applicable, in Post-GST era. 10. Further, the DGAP has mentioned that on scrutiny of the documents received from the Standing Committee on Anti-profiteering, it was observed that the Haryana State Screening Committee had stated that in the subject case, extra charging of GST by the Respondent and date of booking was not mentioned. The Applicant No. 1 had made an application dated 02.02.2019 for booking of Apartment No. 1602 in Tower T-3 of the....
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....had all taken place in the post-GST regime. Therefore, there was no pre-GST tax rate or ITC structure which could be compared with the post-GST tax rate and ITC. The Respondent would have taken into consideration the benefits of ITC which was available to him post implementation of GST while fixing the base price. On the basis of the details of the outward supply of Construction services submitted by the Respondent, the DGAP had observed that the service was supplied in the State of Haryana only. 13. The DGAP has further reported that Section 171 of the CGST Act, 2017 came into play in the event where there was a reduction in the rate of tax or there was an increase in the benefit of ITC. In the present case, since the project itself was launched after implementation of GST w.e.f. 01.07.2017, there was no pre-GST tax rate or ITC availability that could be compared with the post-GST tax rate and ITC, to determine whether there was any benefit that was required to be passed on by way of reduced price. 14. Further. the DGAP has concluded that in view of the afore mentioned findings, it appeared that Section 171 (1) of the CGST Act, 2017 has not been contravened by the Respondent....