TaxTMI 
TaxTMI 
2020 (12) TMI 785
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....ad not passed on the benefit of ITC to him by way of commensurate reduction in the price of his residential unit and that GST had been charged on the amounts due to him against payments to be made by him to the Respondent. Along with the application, Applicant No. 1 also submitted copies of demand letters issued by Respondent to him. On receipt of the aforesaid reference from the Standing Committee on Anti-profiteering on 09.10.2019, a Notice under Rule 129 of the Rules was issued by the DGAP on 22.10.2019, calling upon the Respondent to reply as to whether he admitted that the benefit of ITC had not been passed on to the recipients by way of commensurate reduction in price 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. Further, the Respondent was allowed to inspect the non-confidential evidence/information which formed the basis of the said Notice, during the period 30.10.2019 or 31.10.2019. However, the Respondent did not avail of the opportunity. Further, vide his e-mail dated 24.01.2020, Applicant No. 1 was also given an opportunity by the DGAP to inspect the non-con....
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.....e. in cases where the transfer of property in goods/services was partly made in pre-GST regime and balance was paid after the introduction of GST, to ensure that the benefit of additional ITC made available to the service provider upon introduction of the GST regime, which was not available or was a part of the cost in earlier regime, was duly transferred/passed on to the buyers. (vi) That the Hon'ble Supreme Court in case of Larsen & Turbo Limited & others Vs State of Karnataka & other's (2013) 65 VST 1 (SC)=2014 1 SCC 708) = 2013 (9) TMI 853 - SUPREME COURT held that "The activity of construction undertaken by the developer etc. would be work contract only from the stage he entered into a contract with the flat purchaser" (vii) That all the events including the allotment of the Flats on 27.10.2017, the agreement between him (the Respondent) & the Buyer duly executed on 08.11.2017 & construction activities started on 25.09.2017, occurred within the GST regime. The transaction between the builder & the buyer was covered by clause (b) of paragraph 5 of Schedule II of the CGST Act from the date the buyer was allotted the flat i.e. 27.10.2017 or the date of signing ....
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....r-7, Floor -4 that he had sold to Applicant No. 1. The said flat measured 552.36 sq. ft. (plus 79.65 sq. ft. of balcony area), at a total basic sale price of Rs. 22,49,265/- (@Rs. 4000/- basic sale price per sq. ft. for super buildup area of 552.36 sq. ft. and Rs. 500 per sq. ft. for balcony area). The details of amounts and taxes paid by Applicant No. 1 to the Respondent were furnished in Table-'A' below:- Table-'A' (Amount in Rs.) SI.No. Payment Stage Due Date Basic% BSP GST Total Rate of GST A B C D E F G=E+F H=F/E 1. At the time of Application 21.07.2017 5% 1,12,463 13,496 1,25,959 12% 2. At the time of Allotment 16.11.2017 20% 4,49,853 53,982 5,03,835 12% 3. Within 6 months of Allotment 02.05.2018 12.50% 2,81,158 22,492 3,03,650 8% 4. Within 12 months of Allotment 27.10.2018 12.50% 2,81,158 22,492 3,03,650 8% 5. Within 18 months of Allotment 27.04.2019 12.50% 2,81,158 22,492 3,03,650 8% 6. Within 24 months of Allotment 31.10.2019 12.50% 2,81,158 22,492 3,03,650 8% 7. Within 30....
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....had the Respondent entered into his agreement with the contractor for the construction of the project, i.e. on 22.09.2017. The DGAP has also stated that the draw of lots was held only on 27.10.2017 and that the first Builder-Buyer agreement was entered into only on 08.11.2017. 11. Based on the above chronology of events related to the subject project, the DGAP has reported that it was clear to him that the project The Millenia' was launched in the post-GST regime itself and that there was no price history of sale of units in the subject project in the pre-GST regime that could be compared with the Post-GST base price for computation of profiteering. The DGAP has further reported that as per para 5 of Annexure- A of Affordable Housing Policy 2013. notified by the Haryana Government on 19.08.2013, Rs. 4000/- per sq. ft. of carpet area (apart from the balcony area) has been fixed as the maximum allotment price for Gurugram. The DGAP has added that although this is the maximum price at which residential units constructed under the above Policy were required to be sold, the supplier was free to fix his base price at any level subject to the ceiling of Rs. 4000/- per sq. ft. 12. Th....
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.... did not file any submissions in writing. 15. Meanwhile, this Authority, vide its Order dated 09.10.2020, directed the DGAP to clarify the reasons for having treated the subject project as one that had commenced in the post-GST period (i.e. after 01.07.2017) although the Licence for construction of the project had been issued on 02.02.2017 and the RERA registration certificate had been issued on 20.06.2017. The said clarification was sought by this Authority in terms of Rule 133 (2A) of the CGST Rules 2017 in the context of DGAP Report dated 28.02.2020. 16. The DGAP, vide its Report dated 05.11.2020, submitted the chronology of the benchmark events relating to the impugned project, which is in the Chart below:- CHART S.No. Date Event 1 02.02.2017 Grant of License by the Director, Town and Country Planning Department, Haryana 2 20.06.2017 Issuance of registration certificate by the Haryana Real Estate Regulatory Authority 3 01.07.2017 Introduction of Goods and Services Tax 4 21.08.2017 Issuance of Environment Clearance Certificate Work order for construction to the contractor 5 22.09.2017 Construction activities started ....
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....tion of works contract existing in section 65B of the Finance Act, 1994 and under the Central Goods and Services Act, 2017 and submitted that on perusal of the definition of works contract in the respective Acts, projects got covered under works contract and the related profiteering provisions, once the following requisite elements were fulfilled: - (i) There should be transfer of property in goods and service: (ii) There should be exchange of consideration. (iii) There should be two or more parties to the agreement. (iv) There should be an immovable property under contract He also submitted that in the present case, except for existence of immovable property, which till 30.06.2017 was not under contract with the home buyers, the other elements were found missing. 20. The DGAP also stated that grant of License by the Director, Town and Country Planning Department, Haryana and registration certificate by the Haryana Real Estate Regulatory Authority were the requirements to comply with the relevant laws being in force. Therefore, invoking of Anti-Profiteering provisions has no relation with the DG TCP's license or RERA registration date. He f....
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....eld on 27.10.2017. The first agreement between the buyer and the Respondent was executed on 08.11.2017. Therefore, it was apparent that the Applicant No. 1 had applied for allotment and was allotted the above flat after coming in to force of the GST w.e.f. 01.07.2017. Since the above project was not under execution in the pre-GST period i.e. before 01.07.2017 therefore, no comparison could be made between the ITC which was unavailable to the Respondent before 01.07.2017 and after 01.07.2017 to determine whether the Respondent had benefitted from additional availability of ITC or not. From the above facts it are established that there had been no additional benefit of ITC to the Respondent and hence he was not required to pass on its benefit to the above Applicant No.1 by reducing the price of the flat. The Applicant No. 1 could have availed the above benefit only if the above project was under execution before coming in to force of the GST as the Respondent would have been eligible to avail ITC on the purchase of goods and services after 01.07.2017 on which he was not entitled to do so before the above date. Since there is no basis for comparison of ITC available before and after 0....