TaxTMI 
TaxTMI 
2020 (8) TMI 773
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....ded VAT and Service Tax in the MRP of the flat at the time of booking and demanded 12% GST on the pending amount which had resulted in double taxation, whereas the Respondent was actually required to pass on the benefit of ITC for the construction done after the GST implementation which he had not passed on. 2. The Standing Committee on Anti-profiteering had referred the above application to the DGAP recommending a detailed investigation and to ollect evidence necessary to determine whether the benefit of ITC had been passed on by the Respondent to the recipients in respect of the construction service supplied by the Respondent. On receipt of the reference from the Standing Committee on Anti-profiteering, a notice under Rule 129 (3) of the above Rules was issued on 16.05.2019 by the DGAP, calling upon the Respondent to reply as to whether he admitted that the benefit of ITC had not been passed on to his recipients by way of commensurate reduction in prices of the flats and if so. to suo moto determine the quantum thereof and indicate the same in his reply to the notice as well as furnish all documents in support of his reply. The Respondent was also allowed to inspect the relied....
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....f which has been furnished by the DGAP as has been mentioned below:- a. That the Respondent was a Pvt. Ltd. company incorporated under the Companies Act, 1956 in the year 2017. The Respondent had only filed GSTR-3B Returns for the period from July, 2017 to August, 2018 and GSTR-1 Returns for the period from July, 2017 to December, 2018. b. That he was engaged in the real estate activities like formation of layouts and construction of residential villas, apartment and other construction related contracts in and around Bengaluru. The details of all the projects undertaken by the Respondent have been furnished by the DGAP as is mentioned below:- Sr. No. Name of the Project Type of Project Project Commencement Date Completion Date 1 Suvarna Bhoomi Phase-I Residential Plotted layout 2007 2010 2 Suvarna Bhoom Phase-I Residential Plotted Layout 2008 2010 3 Aryan Grand Residency Residential Villa 2008 2008/2009 4 Aryan Orchid Residential Apartment 2009 2011 5 Green Park Residential Group Housing 2012-13 Due to certain land title dispute, the High Court of Karnataka had stayed further....
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....TR-3B Returns from September. 2018 onwards. Since he had defaulted in discharging his GST liabilities and in filing of GST Returns, the Jurisdictional State GST office had cancelled his GST registration. At present the Respondent was not in a position to discharge the GST liability but was making best efforts to make the payment of GST and revoke the GST registration. iv. That in respect of the project "Aryan Founttain Square" he had not availed any ITC of GST during the period from July, 2017 to March, 2018. v. That the Respondent was short of funds to carry out business operations properly and all the on-going projects were held up due to this financial crisis and position of the Respondent. vi. That the Respondent was not in a position to pay salary to his staff due to which his Accountant had left the job. vii. That in the absence of Accountant he was not able to maintain the proper records and also could not comply with the legal obligations with the tax authorities. viii. That due to these prevailing situations, he was mentally stressed leading to lot of official as well as family problems. ix. That considering his present....
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.... tax, there must be a commensurate reduction in prices of the goods or services supplied by a registered person and the final price being charged on each supply must be reduced commensurately with the extent of benefit and there was no other legally tenable mode of passing on such benefits to the recipients/consumers. 13. The DGAP has also reported that the Respondent vide his statement dated 21.11.2019 had submitted copy of the sale agreement wherein the details of payment schedule in respect of the flat purchased by a buyer have been furnished as per Table-` A' below:- Table-'A' (Amount in Rs.) Sr. No. Payment Stage Demand 1 Booking 200000 2 On Agreement (Less Booking) 20% 3 Within 30 days from the date of Agreement 10% 4 Foundation 10% 5 Ground Floor Slab 5% 6 First Floor Slab 5% 7 Second Floor Slab 5% 8 Third Floor Slab 5% 9 Fourth Floor Slab 5% 10 Fifth Floor Slab 5% 11 Sixth Floor Slab 5% 12 Seventh Floor Slab 5% 13 Terrace Floor Slab 5% 14 Masonry 5% 15 Plastering/Painting 5% 16 Possession 5% Total 100....
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....ailed any ITC but received amount on account of prices of the flats. Hence, no comparison of credit available in the pre and the post GST periods could be made by the DGAP. Therefore, in the absence of any credit availability in the post GST period there might not be any commensurate reduction in prices on account of ITC accrual. 17. The DGAP has also submitted that the Respondent's project "Aryan Founttain Square" was started in 2012 and most of the work of the project was completed in 2014 but the project could not be completed on time. However, the Respondent had completed the project in March, 2018 and obtained the OC on 11.04.2018. It was also observed that the Respondent had failed to pay due Service Tax in the pre-GST period and had also defaulted in the payment of GST and filing of GST Returns in the post-GST period. Since the Respondent had neither paid Service Tax nor filed Service Tax Returns. it could be concluded that the Respondent did not avail any CENVAT/credit of the input services during the period from 01.04.2016 to 30.06.2017 (Pre-GST period). Further, in post-GST period from 01.07.2017 to 30.04 2019, the Respondent had not availed any ITC in respect of t....
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....refer to Section 171 of the CGST Act, 2017 which provides as under:- "(1). Any reduction in rate of tax on any supply of goods or services or the benefit of ITC shall be passed on to the recipient by way of commensurate reduction in prices." (2). The Central Government may, on recommendations of the Council, by notification, constitute an Authority, or empower an existing Authority constituted under any law for the time being in force, to examine whether ITCs availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him. (3). The Authority referred to in sub-section (2) shall exercise such powers and discharge such functions as may be prescribed. (3A) Where the Authority referred to in sub-section (2) after holding examination as required under the said sub-section comes to the conclusion that any registered person has profiteered under sub-section (1), such person shall be liable to pay penalty equivalent to ten percent of the amount so profiteered: PROVIDED that no penalty shall be leviable if the profiteered amount is d....