TaxTMI 
TaxTMI 
2022 (5) TMI 841
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.... project "Pursuit of a Radical Rhapsody" and had alleged that the Respondent had not passed on the benefit of Input Tax Credit (ITC) to him by way of commensurate reduction in the prices. 2. The DGAP has further reported that the Karnataka State Screening Committee on Anti-profiteering examined the said Application and observed that the Respondent had not passed on the appropriate benefit of ITC to the Applicant No. 1 as the additional ITC available to Respondent should have been apportioned against the installments towards the price of the flat. The Karnataka State Screening Committee forwarded the said Application with its recommendation, to the Standing Committee on Anti-profiteering for further action, in terms of Rule 128 of the Rules. 3. The DGAP has further stated that the aforesaid reference was examined by the Standing Committee on Anti-profiteering, in its meeting held on 20.03.2020, the minutes of which were received in the DGAP's office on 06.05.2020, whereby it was decided to forward the same to this Authority, to conduct a detailed investigation in the matter. 4. The DGAP has also stated that the Applicant No. 1 had submitted the following documents along....
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....post-GST implementation. Further, the Respondent had been availing additional benefit of ITC and using the same to discharge his GST liabilities against the demands raised or advances received since GST implementation, while collecting GST from the home-buyers without extending any benefit to the home-buyers all this while. Accordingly, irrespective of the request of the Applicant No. 1, the investigation was not dropped and vide e-mail dated 23.12.2020, the Applicant No. 1 was given an opportunity to inspect the non-confidential documents/reply furnished by the Respondent on or before 29.12.2020, which the Applicant No. 1 did not avail of. 8. The DGAP has stated that the period covered by the current investigation was from 01.07.2017 to 30.04.2020 9. The DGAP has further reported that as the reference was received in the DGAP's Office on 06.05.2020, the time limit to complete the investigation was up to 05.11.2020, unless extended by a further period of 3 months as per Rule 129(6) of the Rules by this Authority. However, in light of Covid-19 pandemic, the investigation could not be completed on or before the above dates due to force majeure. Accordingly, this Report was ....
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.... benefit to the recipients, in terms of Section 171 of the CGST Act, 2017. 14. The DGAP has also reported that para 5 of Schedule-III of the CGST Act, 2017 (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 CGST Act, 2017 reads as "(b) construction of a complex, building, civil structure or a part 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 competent authority or after his first occupation, whichever was earlier". Thus, the ITC pertaining to the residential units which was under construction but not sold was provisional ITC which might be required to be reversed by the Respondent if such units remained unsold at the time of issue of the Completion Certificate, in terms of Section 17 (2) & Section 17 (3) of the CGST Act, 2017, which read as under:- Section 17 (2) "Where the goods or services or both ....
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....s well as new projects, and maintain separate accounts for each of the projects. In compliance, he had obtained RERA registration for each of the on-going projects as well as for other phases planned and hence each phase should be considered as a separate project. f. The Respondent vide his submissions dated 29.12.2020, provided the RERA certificate for each of the separate phases, vide his submissions dated 24.12.2020, provided details of credit availed during pre & post GST regime for Phase -I. g. That he maintained separate accounts for each of these phases. From RERA certificate and separate books of accounts for CENVAT/ITC maintained by the Respondent it was claimed by him that each project was different from another and Phase-II and Phase-Ill were launched post-GST. Credit of one project might not be clubbed with other project else it should jeopardize the interest of the home-buyers of one project at the cost of benefit to the other. Sl.No. Project Name RERA Registration Project Start Date as per RERA Date of Approval as per RERA 1. Pursuit of a Radical Rhapsody Phase 1 PRM/KA/RERA/1251/446/PR/171014/000433 19-10-2015 14-10-201....
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....pleted in Phase-II, where RERA approval was received in January 2019 only. Further, as seen from the documents uploaded to the RERA Karnataka it appeared that the Building Plan was approved way back in October, 2015. In respect of the other phase i.e. Phase-I wherein the bookings had started way back in 2011-12 the percentage of completion up to 31.03.2019 was only 53. As seen from the Respondent submission dated 24.12.2020, it was observed that the Respondent sold certain units in Towers 5, 6 & 7, in the pre-GST period itself which was in contradiction to his contention of commencement of Phase-II in post-GST period. In the light of the above facts, the bifurcation of ITC for Phase I & II given by the Respondent didn't appear to be proper. Therefore, in the light of the observations discussed supra both the phases i.e. Phase I & 11 had been considered for the purpose of determination of profiteering. As no units were sold in Phase-Ill, and RERA approvals were also received beyond the impugned period covered under the investigation, Phase-Ill was being excluded from the purview of investigation. 19. The DGAP has further submitted that prior to 01.07.2017, i.e., before GST wa....
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....ction service (after one third abatement towards value of land, effective GST rate was 12% on the gross value), vide Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. Accordingly, the profiteering had been examined by comparing the applicable tax rate and ITC available to the Respondent during for the pre-GST period (April, 2016 to June, 2017) when Service Tax @ 15% on net value of work contract (60% abatement on the gross value)(total tax rate was 6% on the basic price)and VAT@ 14.50% on the net construction value (30% abatement on the gross value)(total tax rate was 10.15% on the basic price) were leviable with the post-GST period (July, 2017 to April, 2019) when the effective GST rate was 12% on the gross value. 21. The DGAP has submitted that the basis of the figures contained in table- 'B' above, the comparative figures of ITC availed/available as a percentage of the turnover in the pre-GST and post-GST periods and the recalibrated basic price as well as the excess collection (profiteering) during the post-GST period, was tabulated in table- 'B' below: Table 'B' (Pursuit of a Radical Rhapsody)* (Amount in Rs.) S.No. Particulars ....
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....e Respondent during the period 01.07.2017 to 30.04.2020, the amount of benefit of ITC not passed on to the recipients or in other words, the profiteered amount comes to 3,87,94,493/- which included GST on the base profiteered amount of 3,46,37,940/-. The buyer (of flats sold up to 30.04.2020) and unit no. wise break-up of this amount was given for Project "Pursuit of Radical Rhapsody-I & II". 24. The DGAP has further stated that the investigation, it was pertinent to mention here that above computation of profiteering was with respect to 380 home buyers among all the live customers as on 30.04.2020 in the project "Pursuit of Radical Rhapsody-I & II". 25. The DGAP has further submitted that the above discussion, it appears that post-GST, the benefit of additional ITC to the tune of 0.82% of the turnover, accrued to the Respondent and the same was required to be passed on by the Respondent to Applicant No 1 and the other eligible recipients. Section 171 of the CGST Act, 2017 appears to had been contravened by the Respondent inasmuch as the benefit of additional ITC on the demand raised by the Respondent during the post-GST period from 01.07.2017 to 30.04.2020, had not been comm....
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.... Radical Rhapsody Phase I: I. Agreement for sale II. Construction agreement III. Interior customization supplementary agreement (ICSA) That the Respondent replied to DGAP vide letter dated 12/10/2020 with the copies of all the three agreements entered with the Applicant No. 1 for unit No. 1114 and also intimated the deliberations he had regarding reduction in price in the final bills. The Applicant No. 1 was under the wrong impression the ITC was being paid in cash and when explained in detail he agreed for adjustment of the same in the final settlement. The Applicant No. 1 informed the Respondent that he had withdrawn the complaint filed before the DGAP stating that he had realized his mistake and was withdrawing his complaint. The Applicant No. 1 had also forwarded copy of the same to him. In view of withdrawal of the complaint the Respondent requested for conclusion of the investigation. However the DGAP vide email dated 23/12/2020 sought for the documents and continued to investigate the matter in spite of the withdrawal of the complaint by the Applicant No. 1. The anti-profiteering investigation was initiated based on the complaint of the Ap....
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....ective immediately at the time of paying the money. In the Construction Sector most of the time the Applicant No. 1payed the money at a later date and the constructor provided the services before and the payments were normally in stages. It was very important to note the fact that the supply Construction Service was 'continuous supply of service' and each stage could not be considered as individual supply to quantify the reduction in price and to pass on corresponding benefit of ITC. It was a case where the ITC was availed was on the investment made by the Respondent and not of the Applicant No.1 for that matter. Hence attributing the innuendo to his motive appeared to be not correct when the facts were otherwise and he had to be given time to settle the benefit of ITC in the final stages after correctly arriving at the exact figures rather than the imaginary figures based on the ratio adopted on certain assumptions which might not reflect the true and correct figure. This fact was clearly understood by the State Screening Committee and had clearly stated in his Report that "the additional ITC available to Respondent should have been apportioned against the installments tow....
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....area of construction in respect of Phase Phase it and Phase III and then compared the time factor required to complete the project or for that matter the %age of construction in 3 months' time before concluding that Phase II commenced pre-GST to determine the Anti-Profiteering. The comparative figures of the saleable area of construction in respect of Phase I, II and III has been furnished in the Table below:- Phase I Phase II Phase III Residential Residential Residential Commercial No. of units Saleable Area (in sq ft) No. of units Saleable Area (in sq ft) No. of units Saleable Area (in sq ft) 468 1725952 227 772393 365000 (e) As could be seen from the above table the saleable area was more than double in case of Phase I compared to Phase II and in case of Phase III it was half of Phase II. It was a natural corollary that more the area that time taken for completion was also more. Hence it appeared the allegation made by the DGAP based on the assumptions and presumptions that Phase II started pre-GST and the bifurcation of ITC for Phase I and II given by the Respondent did not appear to be prope....
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....n needed to be discarded ab-initio. The data provided by the Respondent indicated in the case of Phase II, in respect of units namely Mr. Nagappa Pillappa and M/s Bennet Coleman & Co. Ltd. certain pre-launch bookings were made and the data of these pre-launch bookings were duly provided to the DGAP in his Reports. Copies of all these pre-launch booking offers and the agreements were enclosed with this reply. Pre-launch bookings were not sales as indicated by the DGAP. Pre-launch bookings were the bookings offered to the buyers at the initial stages of launch that were even before the approvals and permissions were obtained. It was only an offer in the event of commencement of project the intending buyer would be given preference in allotment, rate and other benefits depending on the offer. It did not offer the buyer the guaranteed right or the title to the property. It was a case where Earnest Money Deposit was made by the buyer and could be taken back anytime with interest after due date. In case the buyer wanted the property after all the approvals was obtained and the project was really launched then he had to enter into agreement to sale / maintenance. The salient features of t....
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.... the First installment (Advance) had been paid in full and the Agreement for Sale signed, the unit could be transferred at a cost of INR 5,00,000/- (Rupees Five Lakhs only) and in such case, the potential Transferee would have to meet and be approved by the Respondent. viii. It was clearly agreed by the Intending Purchaser that, in case the approval was substantially delayed or if Total Environment decided not to go ahead with the project, the Advance amount received should be refunded without interest and no compensation for the same shall be payable by the Respondent. ix. In addition to the above amounts, Service Tax & VAT as applicable at prevailing rates should be payable along with every installment. x. Stamp duties and registration fees as well as incidental expenses should be payable on actuals by the Intending Purchaser on the Agreement for Sale as well as on the registration of the Sale Deed. xi. All payments towards customization and improvements should be payable in full immediately on completion of the customization process. xii. Payments towards Power, Water & Sewerage Installations, Connections & Deposits should be payable ....
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....e buyer to sell this offer to anybody else. The pre-launch agreement did not mean the property was already sold. After the commencement of the project the buyer was once again required to enter into sale agreement and Construction Agreement and paid the amount of advance/ installment separately. The EMD given by the buyer was returned to him once the agreement to sale/ construction was entered into. In this case the agreement to sale & Construction Agreement was yet to be signed. Hence by no stretch of imagination the inference could be made that certain units in tower 5, 6 and 7 were sold in Phase II project in pre GST era. This was the fundamental error made by the DGAP without verifying the documentary evidences and throwing bald allegations against the Respondent which was not substantiated and far from facts. The Hon'ble Supreme Court in case of L&T and others v/s State of Karnataka (2013) 65V 511 (SC)=2014/SSL708 held : "The activity of construction undertaken by the Developer etc would be works contract only from the stage he enters into contract with the flat purchases". Hence in his case in respect of these flat buyers though these was pre-launch book....
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....se of Phase II and Phase III work commenced only after implementation of GST. The Phase I project had commenced before implementation of GST on 19.10.2015. If different towers were considered as one project and credit of one Phase was clubbed with that of other Phase it could jeopardize the interest of home buyers of one Phase at the cost of another. On this ground if any one raised the demand from Phase II for the erroneous calculation of adding Phase I it would only open a Pandora's box and could not be justified. Given the different stages of construction of each tower if the turnover of all the towers was clubbed together it might not be accurate and would definitely give erroneous results. In the present case where separate books of accounts were maintained by the Respondent for each phase, separate purchase registers and ITC ledgers maintained for each phase, reconciliation of turnover to credit with statutory returns was provided and could be verified for authenticity. (l) That though Anti-profiteering provisions mandated passing on the tax benefits arising from the GST to the customers by way of price reduction, without clear guidelines or explicit Rules it was....
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....ry. (p) That agreement for sale of premises entered into between the buyer and the Respondent had specified the milestones for recovery of the amount the invoice could be raised only on achieving milestones whereas the credit accrued to him on incurring expenditure for construction of the project. Therefore, there was no synchronization between the credit availed and the value of taxable service provided during any period. Due to this reason, the percentage of availment of credit during the period would also vary. (q) That there was no synchronization between the work done and billing which also led to no synchronization between the credit availment and billing. (r) That the DGAP had also stated that VAT was charged on the Works Contract Agreement executed between the buyers and the Respondent in terms of the explicit definition provided in Section 2 (29 (b) of the KVAT Act. Hence, the claim of admissibility of VAT credit and his inclusion while deciding the costing of units was correct and ITC of VAT in the pre-GST period was considered to determine the additional benefit of ITC post implementation of GST. Even though this case, only the erstwhile Excise....
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.... held "... The DGAP had further mentioned that if different towers were considered as one project and credit of one tower was clubbed with the other tower, it could jeopardize the interest of the home-buyers of one tower at the cost of another, Further, given the different stages of construction of each tower, the Completion Certificates received for some of them, whereas others being in different stages of construction Life cycle. The ratio of ITC to the turnover for all the towers clubbed together might not be accurate and would give erroneous results. In this scenario, where separate books of accounts had been maintained by the Respondent for each tower, separate purchase register and ITC ledger had been maintained for each phase, reconciliation of credit and turnover for each tower with the statutory returns had been provided which had been duly verified and found to be in order, it was very logical to consider each of them as a separate project, the DGAP had claimed. As the two complaints pertained to the project "PARKWEST-EMERALD", and "PARKWEST-MAPLE" respectively, the ambit of this investigation had been kept limited to these two projects only". (v) That the case o....
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....er was 53% whereas the percentage of completion in respect of Phase - II wherein the RERA certificate had been received on 02.01.2019 was 29% only. Following were the details regarding the work completion for phase I & II: Phase I Phase II Land Portion Construction Portion Total Land Portion Construction Portion Total March 19 14% 39% 53% 13% 16% 29% The percentage of completion in both the cases included land portion also as submitted by the Respondent. However, the site preparation was a significant factor in the Construction Sector in as much as the construction work could not commence unless the land was made suitable for construction. On this count the submission of the Respondent appeared to be not tenable. Further, as seen from the Respondent's submission itself, it was evident that the Towers 5 to 7 and villas 50 to 64 belong to Phase-II and certain units had been sold in the pre GST period itself and certain amounts had been received by whatever nomenclature they might be designated attract GST in as much as the said amount was with reference to provision of service at a later date. Provisions en....
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....d that the profiteering amount had been computed following the procedure adopted by the DGAP in all his cases in respect of Construction Sector and upheld by the Authority in such cases. k. That for the claim made by the Respondent at para 26 of his submissions it was stated that the computation of profiteering had been limited up to April, 2020 and was arrived based on the prevailing rates. Profiteering, if any, to be passed on would had to be worked out by the Respondent on his own following the procedure upheld by this Authority in the instant case and the same was to be passed on to the intended beneficiaries in proportion to the demands raised subsequent to April, 2020. 30. On the basis of the above Clarifications filed by the DGAP under Rule 133 (2A) of the Rules, the Respondent was directed to file rejoinder/reply. The Respondent vide his letter dated 05.04.2021 has filed his Rejoinder and stated:- a. That the DGAP had stated "there was no provision envisaged under the CGST Act, 2017 or the Rules there under to drop the verification of profiteering once the Applicant No. 1 withdraws his complaint". It was absurd to note that the DGAP was looking for a cl....
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....the only reason to pass on nor the reason to quantify profitability due to the availment of ITC. It was ludicrous to presume when there was no specific provision in the Act more so and when specifically Section 171 of CGST Act states, "Any reduction in rate of tax on any supply of goods and services or the benefit of ITC shall be passed on to the recipient by way of commensurate reduction in prices". Even this Section clearly specifies that the profit if at all, was to be passed on to the recipient at the time of supply or service. In the case of the Construction Work the supply and service was completed only at the time of handing over of the flat and not at the time of availing ITC credit. Hence, the Respondent was legally correct to pass on the benefit if at all only at the time of handing over of the flat or at the time receipt of the last installment of the price. b. That it was averred that in most of the cases the Authority had been taking a stand that since the ITC was already availed by the Respondent the same had to be passed on immediately to the Applicant No. 1 without making him wait for infinity for his dues. But if that was the case the statute would have sp....
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....ata of these pre-launch bookings were duly provided to the DGAP in his replies. Copies of these entire pre-launch booking offers and the agreements were enclosed with the reply. Pre-launch bookings were not sales as indicated by the DGAP. Pre-launch bookings were the bookings offered to the buyers at the initial stages of launch that was even before the approvals and permissions were obtained. It was only an offer in the event of commencement of project; the intending buyer would be given preference in allotment, rate and other benefits depending on the offer. It did not offer the buyer the guaranteed right or the title to the property. It was a case where Earnest Money Deposit was made by the buyer and could be taken back anytime with interest after due date. In case the buyer wanted the property after all the approvals was obtained and the project was really launched then he had to enter into a separate agreement to sale / maintenance. The salient features of the pre-launch offer in Phase II wherein such buyers had envisaged his interest in respect of above said pre-launch bookings was submitted in written submissions dated 15.02.2021. Further, the DGAP in his Clarifications and ....
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....rence from one quarterly progress Report of Phase II was totally inaccurate and illogical and needed to be duly rescinded. d. That it was a fact that the law with regard to the assessment of tax on advances was identical in Service Tax and GST However the payment of due taxes or otherwise should not be a factor in computation of profiteering. Even if tax was not paid, where liable, the unpaid tax amount could not be considered as part of profit. It was a well-known fact that Government could not make Rules to distribute ill-gotten money, if tax was not paid the same could be recovered under relevant law. If not recovered no Authority under law could say the unpaid tax was profit and needed to be passed on to customers. In the case of pre-launch bookings the Respondent had not collected Service Tax from the clients as these were Earnest Money Deposits which were to be returned to the homebuyers when they enter into agreement for construction and pay the first installment. Further all these pre-launch bookings date back to 2012 and even if the revenue decided that the same was taxable, tax could not be demanded as the same was time bared. Hence even on this count when the ta....
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.... services or both other than those covered in the Report of the DGAP, it may, for reasons to be recorded in writing, within the time limit specified in sub Rule (1), direct the DGAP to cause Investigation or inquiry with regard to such other goods or services or both, in accordance with the provisions of the Act and these rules. However, the DGAP had crossed his mandate without any directions on record to cover one of phases launched post-GST while choosing to ignore another. Authority had established a precedent in case of Construction Sector, that if required, it might direct the DGAP under Rule 133(5) of the Rules to investigate any other project besides the one under Investigation for violation of Section 171 of the CGST Act. However, in the present case, the DGAP had selectively chosen to investigate a post-GST launch project, clubbing it with an ongoing project, while leaving another such out of it without giving any logic or following any rules whatsoever. f. That the DGAP had come up with a lame excuse that the annexures were not legible however the Respondent had furnished the legible copies and also reproduced in his reply all the clauses mentioned in the pre boo....
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.... for the said supply. In his case the pre-launch deposit was purely considered as refundable deposit and once the client books the flat we enter into agreement and refund the pre-launch deposit as on date these clients was yet to book his flats and was still considered as deposits. Further, the project commenced post GST hence GST Law was applicable in respect of this project and the deposits so collected amount had to be excluded while calculating the profiteering. The DGAP had stated "Once the expression of interest was offered and amount was received for provision of Service at a later date, the amount was taxable under Finance Act1994 read with Point of Taxation Rules 2011 as amended from time to time irrespective of the nomenclature adopted." Now that DGAP was very well aware of the point of taxation and the pre-launch booking advances were made as early as 2012, even if the amount were to be taxable under the Service Tax laws, the same ought to have been demanded within 5 years of receipt of such deposit and the same was time barred. Hence there could not be any demand of tax on the deposit received towards pre-launch booking for the very own reasons quoted by the DG....
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....ch of the projects with RERA was mentioned clearly. Prior to implementation of RERA, there could be difference of opinion as to what should constitute initiation of a project but implementation of RERA, another central legislation which guided Real Estate Sector, and was implemented around the same time as GST had provided specific provisions for registration of all Real Estate Projects whether new or existing under different provisions. Phase H and III of the project were registered with RERA as a new project. Details of the project was as below: Sl.No. Project Phase RERA Registration Details Date of Approval as per RERA 1. Pursuit of a Radical Rhapsody Phase 1 PRM/KA/RERA/1251/446/PR/171014/000433 14-10-2017 (Ongoing Project when RERA was implemented) 2. Pursuit of a Radical Rhapsody Phase 2 PRM/KA/RERA/1251/446/PR/190102/002271 02-01-2019 (New project post RERA implementation) 3. Pursuit of a Radical Rhapsody Phase 3 PRM/KA/RERA/1251/446/PR/200817/003551 17-08-2020 (New project post RERA implementation) The DGAP in his investigation Report seemed to have been in hurry to have overlooked the fact that there was no purchase ....
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.... Tax regime was based on self-assessment. In absence of notification of methodology, the whole purpose of complaint-based investigation and State Level Screening Committee and Standing Committee on Anti-Profiteering was defeated, as the DGAP and the Authority would have to examine each and every real estate service provider. Even if the methodology were to be accepted, which the Respondent did not agree to, if for the period subsequent to April, 2020, the ratio of ITC to Turnover came lower than said ratio for the period April 2016 to June 2017, and the question that arose was whether he could collect such additional amount from the customers, for the said period. 31. The quasi-judicial proceedings in the matter could not be completed by the Authority due to lack of required quorum of members in the Authority during the period 29.04.2021 till 23.02.2022, and that the minimum quorum was restored only w.e.f. 23.02.2022 and hence the matter was taken up for quasi-judicial proceedings vide Order dated 23.03.2022 and hearing in the matter through Video Conferencing was scheduled to be held on 31.03.2022. 32. Therefore, hearing in the matter was held on 31.03.2022. Same wa....
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....sions the Respondent has also averred that the exact cost of the project could be arrived only after completion of the structure. As per the Respondent, as long as the transaction was alive and not finalised and the total price of the project could not be finalised and corresponding deduction in price could not be quantified. Further. the Respondent has also contended that the ITC was availed on the investment made by the Respondent and not of the Applicant No. 1 and the Respondent have to be given time to settle the benefit of ITC in final stages after correctly arriving at the exact figures. In this connection, the Authority finds that, the main contours of for passing on the benefits of reduction in the rate of tax and the benefit of ITC are enshrined in Section 171 (1) of the CGST Act, 2017 itself which states that "Any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices." The Respondent has got benefit of ITC which he was required to pass on. The ITC accrued on purchase of the material and the GST was payable on accrual basis and the project wise Cenvat / I....
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.... Act, 2017. 38. The Authority finds that, such submission of the Respondent is not evidenced by the facts on record. The record shows that, there was approval by the Competent Authority of one Project on 19.10.2015 i.e. Pursuit of a Radical Rhapsody. The conditions appended by the Competent Authority to the said Approval vide BBMP/ADDL DIRECTOR/JD NORTH/LP/0528/2013-14 dated 19.10.2015 also refer to the Building no. 1 with Wings 1 to 7 as a common structure. There was no demarcation of Phase I and Phase II therein. The approved Project had been approved inter alia for a Structure designated as Building no. 1 with Wing nos 1 to 7 with all common amenities. Consequent to such approval, the land development and construction of the Project along with all the common amenities for the said Building no.1 consisting of seven wings or seven towers was commenced by the Respondent. It was in relation to the said Project as approved that the Respondent has been taking amounts towards bookings from flat/home buyers. 39. The Authority finds that, the Respondent has in their submissions dated 10.02.2021 claimed that the amounts collected before 1.07.2017, from various persons towards Flats/....
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....ed from 1 to 7 in the said Building no.1 as approved by the Competent Authority (which are now demarcated by the Respondent as Tower no. 1 to 7 in Phases I & II) have to be considered together for the purposes of Section 171 of the CGST Act, 2017 and determination of the profiteered amount. The Authority also finds that, the Respondent has obtained approval and begun rendering Construction Service to recipients for all such Wings numbered from 1 to 7 in the said Building no.1 as approved by the Competent Authority (which are now demarcated by the Respondent as Tower no. 1 to 7 in Phases I & II) prior to 1.07.2017. The Authority finds that, the amounts received by the Respondent from M/s Bennet Coleman & Co. Ltd. and Nagappa Pillappa were amounts received towards booking of specified Units/Homes/Flats in the Wings numbered from 1 to 7 in the said Building no.1 as approved by the Competent Authority (which are now demarcated by the Respondent as Tower no. 1 to 7 in Phases I & II). This finding is also substantiated by the record at Annexure II and Annexure III of the submissions dated 1.04.2022 of the Respondent wherein receipts have attached of the TDS @ 1% received by the Responden....
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....spondent has also contended that the DGAP has assumed that the commencement of Phase II in the pre GST period. The Respondent stated that pre-launch bookings are not sales as indicated by the DGAP. For the pre-launch bookings the contract starts only after entering into an agreement for sale which was not entered in pre-GST era. The Respondent has also stated that all the 3 phases were different from one another, invoices were raised separately for the three phases and therefore the credit of one project may not be clubbed with the other project lest it jeopardises the interest of other home buyers. For this contention raised by the Respondent the Authority finds that Service Tax under the Finance Act, 1994 and GST under GST, Act, 2017 were charged on accrual basis and hence as the demands were raised by the Respondent prior to GST period in respect of units of both Phase I & II and therefore tax was payable under the relevant law. Further, profiteering had been computed in respect of Phases I and II clubbed together for the above reason and therefore, the contentions raised by the Respondent are not maintainable. 44. The Respondent vide his submissions has stated that profiteer....
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....ments made to the sub-contractors. This clause in Section 16 of CGST Act, 2017 has no time limit fixed. In this regard, the Authority finds that the above averment made by the Respondent is untenable as the DGAP's Report is prepared under the mandate flowing from Section 171 of the CGST Act, 2017. 47. The Respondent has averred that cancellation of bookings after 1-2 years was a common event in real estate industry. Thus, issuance of credit notes on account of cancellation of contracts imposed a challenge for tax adjustments and might increase tax burden and developer could not refund the tax amount to customers. In this regard, the Authority finds that the cancelled units and units sold post Occupancy Certificate have not been considered for calculation of profiteered amount by the DGAP in his Report. Therefore, the contention raised by the Respondent is not tenable. 48. The Respondent has also claimed that the taxable value did not synchronize in the same month or the same period. In this regard, the Authority finds that, the Report of the DGAP has been prepared and the computation of profiteered amount has been done on the basis of `Procedure and Methodology' for p....
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....by taking into account the particular facts of each case. Hence, there cannot be one-size-fits-all mathematical methodology. In one real estate project, date of start and completion of the project, price of the house/commercial unit, mode of payment of price, stage of completion of the project, timing of purchase of inputs, rates of taxes, amount of ITC availed, total saleable area, area sold and the taxable turnover realised before and after the GST implementation would always be different than those of the other project and hence the amount of benefit of additional ITC to be passed on in respect of one project would not be similar to that of another project. Therefore, in the light of the above, the facts of the case law relied upon by the Respondent are different from his case and hence the averment made by the Respondent is not tenable. 51. It is clear from the plain reading of Section 171 (1) that, it deals with two situations:- one relating to the passing on the benefit of reduction in the rate of tax and the second pertaining to the passing on the 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 n....
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....r is also directed to ensure compliance of this Order. It may be ensured that the benefit of ITC has been passed on to each homebuyer as per this Order along with interest @18%. In this regard an advertisement of appropriate size (large enough to be noticed by the reader) may also be published in minimum of two local Newspapers/vernacular press in Hindi/English/local language with the details i.e. Name of builder (Respondent) - M/s Total Environment Habitat Pvt. Ltd., Project- "Pursuit of a Radical Rhapsody", Location- Bengaluru, Karnataka and profiteered amount of Rs.3,87,94,493/- so that the concerned home buyers can claim the benefit of ITC if not passed on. Home/shop buyers may also be informed that the detailed NAA Order is available on Authority's website www.naa.gov.in. Contact details of concerned Jurisdictional CGST/SGST Officers who are nodal officers for compliance of the NAA's order may also be advertised through the said advertisement. 56. The concerned jurisdictional CGST/SGST Commissioner shall also submit a Report regarding compliance of this order to the Authority and the DGAP within a period of 4 months from the date of receipt of this Order. 57. Fur....
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....2 Raviprasath Anbalan & Mrs Sushma Jy 59,145.41 7 2172 J&J Buying Services Pvt Ltd 32,669.61 8 00 2142 Liz Jacob 31,283.92 6 1151 Shivani Maheshwari 40,276.33 10 Venkatapathy Raju 1121 * 11 2092 Ramkumar Pavothil 81,824.31 12 22 1072 Reuben Kurien 59,506.41 13 1051 Mocherl Durga Ramesh Murthy & 69,753.03 14 1052 Mocherl Durga Ramesh Murthy & 61,979.92 15 1232 Mr. Gottipati Sunil Kumar & 50,521.72 16 1071 Dev Karan Ahuja & 34,313.82 17 1161 Aravinth Babu 40,685.42 18 1171 Aravinth Babu 40,727.61 19 1011 Bharat P Singh 77,255.50 20 20 1021 Bhartendu Sinha 1,62,385.29 21 22 21 2131 Vanita Viswanath 45,025.31 22 1042 Ganesh Vaidhyanathan 66,925.54 23 1023 Ranjit Nanda 70,407.35 24 Rohit Kshetrapal 1181 * 25 1064 Madhur Jain 50,447.69 26 Alok Kumar 2074 27 John Kolathukalathil Punnoose 3211 28 Jaspreet Chadha 3151 * 29 1251 Manish Gupta 47,825.54 30 Suresh Kannan 2054 * 31 1141 Shiva....
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.... 82 Kuppamma 4074 * 83 Kuppamma 4083 * 84 2094 Balaji K 44,541.90 85 Krishna Raju 4114 * 86 Krishna Raju 3084 * 87 Santhosh Kumar 3113 * 88 Raghu K 3054 * 89 Krishnaveni 3073 * 90 Leela Umesh 4073 * 91 Santhosh Kumar 4043 * 92 Venkatamma 4033 * 93 Nirmala.K 3053 * 94 Santhosh Kumar 3044 * 95 Suma.K 3063 * 96 Santhosh Kumar 4313 * 97 2181 Anand Kumar Chandrashekar 65,733.30 98 98 1112 Upendra 51,390.58 Aud 99 1223 Sumana Prabhakara 89,277.13 100 2113 Parveez Shaikh 43,464.92 101 1263 Ajay Sharma 74,310.08 102 2242 Sheila Kuruvilla & Anand Kuruvilla 73,001.01 103 1013 Venbakm C Gopalratnam 59,134.36 104 18 Vani Ganapathy 70,116.90 105 3161 Kiran Vaya 21,540.02 106 2261 Sandeep Devgan 25,242.88 Page 3 of 14 2284 107 Nagarajan Ramakrishnan 13,697.01 1211 108 49,092.77 Dinesh Garg 2153 109 Aditya Saxena 31,566.59 2154 110 Aditya Saxena 33,0....
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....179.52 160 12 Rahul Agarwal 1,05,985.98 161 3222 Girish V Menon & Mrs. Manju G 27,516.92 162 2251 Shailesh Agarwal 56,125.34 163 Bamashish Paul 3242 * 164 25 Amar Babu Radhakrishnan 45,004.07 165 1164 Debashis Biswas 1,12,513.56 166 Sanjay Sahni 3064 * 167 1124 Bhushan 91,511.88 168 Anand Chandrasekhar and Archana A 3052 169 17 Suresh Rethinam 1,26,775.04 170 2053 Subha Tata 26,334.91 171 1242 Archana Nair & Shashi Menon 80,092.47 172 1053 And Mr Prakash Daga 57,348.20 173 2122 Ramasubramanian 87,847.36 174 2063 Vivek Kumar Arora 58,744.19 175 4052 Venkatesh Srikantan 2,54,492.62 176 3232 Berly Kurian 25,774.18 177 2253 Vinayraj Balkrishnan 26,754.17 178 3024 Pramod Kumar Sethi 50,652.78 179 3141 Sai Kumar and Puneeth K. 71,543.99 180 1043 Sachindra Nath 1,18,275.71 Page 5 of 14 181 2132 Prathima Sharma 22,563.87 182 1114 Yogesh Sharma 72,343.28 183 3132 Vivek Sahasranaman 18,665.64 184 Mr ....
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....,19,939.87 231 2173 Manish Kumar Poddar 1,26,881.86 232 1254 Manish Kumar Poddar 1,30,295.72 233 2183 Manish Kumar Poddar 1,34,344.23 234 3042 Narendra Kumar Sirugudi 1,23,084.56 Aul 235 3214 Krishnenjit Roy 82,043.40 236 4194 Chandan 94,037.60 237 4183 Varun Dhussa 96,889.95 238 4153 Shailesh Sultania 94,037.60 239 2111 Prakash Sikaria 1,78,808.29 240 1234 Girish Vishwanath 1,75,266.02 241 4193 Aditi 73,140.35 242 3173 Sunkari Sasidhar 94,037.60 243 4143 Rajesh Mehrotra 1,11,093.82 244 Dashak Agarwal 3194 Page 7 of 14 91,901.33 4184 245 1,11,093.82 Nitin Suvarna 3174 246 Raju A K 83,588.97 3203 247 Sanjeev Somasundaram 1,11,397.69 3114 248 Navdeep Mer 1,06,663.29 3231 249 SUNIL NAIR 1,50,528.42 3111 250 Amit Talwar 1,46,297.69 3264 251 Tanija and Suman 99,730.71 1032 252 Heera Ganjikota 1,37,906.37 3164 253 Neha Ashu Kulkarni 96,889.95 4204 254 Amit Kumar Kansal 1,19,809.87 3163 255 ....
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....rishnan 1,12,210.20 301 7081 Rajalakshmi Padmanaban, Vijay Ferna 1,14,948.98 302 7183 Varun Vaitheeswaran 1,56,079.27 303 7123 Maninder Singh 1,42,958.65 304 7143 Animesh Raizada, Shilpi Raizada 1,31,012.99 305 7203 Rahul Chakrabarty, Ranjita Ghosh 1,49,280.47 306 3224 Ranganath Ananth, Varsha Ranganath 1,15,070.92 307 7173 Ritu Nayak, Niraj Nanavaty 1,39,019.21 Page 9 of 14 308 7053 Ajit Kumar Kokkeri, Sapna Ajit 1,34,787.85 4192 309 Suraj Kumar, Divya Malpe 1,87,081.71 310 7083 Shrimn Nishit, Sanghamitra Bhargov 1,15,862.17 311 7232 Bimal Cyriac 1,61,745.44 7191 312 Biju Aliyas 1,29,851.39 313 7013 Jacob Thomas 99,952.85 314 7142 Sriram Gopalakrishnan 1,29,056.01 315 7153 Niroop G Janardhanan, Ninee Rao 1,39,019.21 316 7043 Govindappa Shankar, Latha Shankar 1,35,029.45 4133 317 Vijay Bright 98,582.84 318 6073 Anand Iyer, Shruthi Athreya 1,28,475.01 319 7162 Preeti Kaushik, Nikhil Goel 1,19,018.60 3143 320 Abhinav Srivastava 1,15,639.07 ....
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.... 365 4152 PRADEEP SINGH 2,19,141.22 366 6014 RABISANKAR PANIGRAHI, SUJ 1,58,191.87 367 47 RG INSURANCE PROCESSING S 31,644.46 368 6223 ROOPA RAJESH AND RAJESH K 1,52,794.44 369 7064 SONAL KHANDUJA 1,40,549.70 370 1202 SOUMITRA SANA 54,995.35 371 SRIDHAR BALASUBRAMANIAN 6203 Page 11 of 14 1,63,654.68 2233 372 SUBHASH CHANDRA SHARMA, R 71,547.72 1082 373 SUDEEP RALHAN 1,59,648.19 1123 374 SWATI GARADI PATEL 1,02,283.77 7091 375 TRIPURESWAR CHATTOPADHAYA 1,26,833.89 2121 376 UMESH SACHDEV 81,895.60 7243 377 VAISHNAVI VENKATARAMAN, G 1,64,987.95 3261 378 VENKATESH SRINIVASAN 2,29,454.74 4253 379 VIJAY YEDAVALLI AND SNIGD 1,45,489.00 4122 380 ZOEB MERCHANT 1,83,504.97 4151 381 NIRANJAN NAGARJAN AND ISH 1,93,286.78 7181 382 SHYAM BHAT 1,57,215.60 7223 383 VENKATRAMAN NAGANATHAN, A 1,48,503.86 6023 384 ABHISHEK KUMAR SINGH 1,52,030.61 4242 385 ALUMOOTIL SAJU GEORGE AND 3,16,947.43 1193 386 1,48,048.29 AMAR 4171 387 ANK....