TaxTMI 
TaxTMI 
2022 (5) TMI 957
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....t Tax Credit (ITC) to him by way of commensurate reduction in the price on implementation of GST w.e.f. 01.07.2017, in terms of Section 171 of the CGST Act, 2017. 2. The DGAP has stated that the aforesaid reference was examined by the Standing Committee on Anti-profiteering, the minutes of which were received by the DGAP on 03.06.2020. 3. The DGAP has submitted that the Applicant No-1 along with the application had submitted the copy of Statement of Account Flat/Space No 222 dated 06.06.2019, post-GST. 4. The DGAP has reported that the Applicant had booked a Flat/Space No. 222 in the Respondent's project "JMD IMPERIAL SUITES", for which Buyer's Agreement was executed on 08.04.2011, in the pre-GST period. 5. The DGAP has further stated that on receipt of the said reference from the Standing Committee on Anti-profiteering, a Notice under Rule 129 of the CGST Rules, 2017 was issued by the Director General of Anti-profiteering on 30.06.2020 calling upon the Respondent to reply as to whether he admit 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 indic....
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.... ft. (approx) and the occupancy certificate for the entire project had been granted by Directorate of Town & Country Planning (DTCP), Haryana vide Memo No. ZP-347/SD(BS)/2018/29796 dated 18.10.2018. 8. The DGAP has also stated that the Respondent despite being requested to clarify as to the nature of agreements entered into with the prospective buyers were wholly construction linked or payment linked or mixed, had not submitted any reply in this regard. Therefore, the period covered by the current investigation had been considered as proposed in the NOI i.e. from 01.07.2017 to 31.05.2020. 9. The DGAP has also submitted that the time limit to complete the investigation was up to 02.12.2020, as per Rule 129(6) of the CGST Rules, 2017. However, due to force majeure caused in the light of Covid-19 pandemic, the investigation could not be completed on or before the above date. In terms of the Notification No. 35/2020-Central Tax dated 03.04.2020 wherein "any time limit for completion or compliance of any action, by any authority or by any person, had been specified in, or prescribed or notified under the said Act, which falls during the period from the 20th day of March, 2020 to t....
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.... 2016 to May, 2020. (i) Details of applicable tax rates, pre-GST and post-GST. (j) Copy of Balance Sheet for FY 2016-17, 2017-18 & 2018-19. (k) Details of VAT, ST, ITC of VAT, CENVAT Credit for the period April, 2016 to June, 2017 and output GST and ITC of VAT, CENVAT Credit for the period July, 2017 to May, 2020. (I) List of home buyers in the project "SUBURBIO-67(Suburbio-1)'. (m) Haryana VAT assessment order for the year 2016-17 issued by the Excise and Taxation Officer-cum-Assessing Authority, Gurugram East. (n) Project wise bifurcation of ITC of VAT for the period April, 2016 to June, 2017 wherein he had intimated that he had not claimed any ITC of VAT for the period April to June, 2017. (o) Status of the project "SUBURBIO-67 (Suburbio-1)" in terms of sold and unsold units. (p) Copy of Occupancy Certificate (Memo No. ZP-347/SD(BS)/2018/29796 dated 18.10.2018). (q) Copy of Conveyance Deed executed on 10.12.2012 between M/s. Ansal Properties & Infrastructure Ltd. and M/s. Anand Dham Realters Pvt. Ltd. in favour of M/s. JMD Ltd. 12. The DGAP has stated that the Respondent vide his letters date....
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....been treated as confidential in terms of Rule 130 of the CGST Rules, 2017. 16. The DGAP has further reported that the subject application and multiple replies submitted by the Respondent along with the documents have been carefully examined. The main issue for determination was whether there was reduction in rate of tax or additional benefit of ITC availed by the Respondent after implementation of GST w.e.f. 01.07.2017 and if so. whether the Respondent passed on such benefit to the recipients, in terms of Section 171 of the CGST Act, 2017. 17. The DGAP has also stated that the other aspect to be considered, while determining profiteering was that para 5 of Schedule-Ill 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 had been rece....
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....UBURB10-67 (Suburbio-1)". Further, as seen from the Respondent's letter dated 29.01.2021 wherein it was communicated that he had not taken VAT input for the period April, 2017 to June, 2017. Accordingly, ITC of VAT of Rs. Rs. 3,66,212/- for the period 01.04.2016 to 30.06.2017 had been considered for computation of profitability. 20. The DGAP reported that the Respondent vide letter dated 25.06.2021 submitted that he had made reversal of ITC against the unsold super area of 1,62,426.39 sq.ft. that was under the exclusive ownership of the Respondent and 1,11,758,61 sq.ft. under the joint ownership with Mr. Sushil Kumar Daima & Ors (mentioned as sandwood in the records of the Respondent) in respect of the units that were unsold. 21. The DGAP has stated that it was observed that prior to 01.07.2017, i.e., before GST was introduced, the Respondent was eligible to avail CENVAT credit of Service Tax paid on the input services. However, CENVAT credit of Central Excise duty paid on the inputs was not admissible as per the CENVAT Credit Rules, 2004, which was in force at the material time. Moreover, in the pre-GST regime as seen from the VAT returns it was observed that he had awar....
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....was issued on 18.10.2018 as such the Respondent had not filed the option to be filled under form four under Notification No. 3/2019, effective from 01/04/2019 for ongoing project. **The credit of Service Tax paid on the input services received for the period April, 2016 to June, 2017 amounting to Rs.1,34,920/- had not been taken into consideration for computing the profiteering in as much as no unit in the jointly owned property (sandwood) was sold and hence does not attract GST. 22. The DGAP submitted that from the above Table-'A', it was clear that the ITC as a percentage of the turnover that was available to the Respondent during the pre-GST period (April, 2016 to June, 2017) was 3.26% and during the post-GST period (July, 2017 to May, 2020), it was 9.89%. This clearly confirmed that post-GST, the Respondent had benefited from additional ITC to the tune of 6.63% [9.89% (-) 3.26%] of the turnover for the project "SUBURB10-67 (Suburbio-1)''. 23. The DGAP has reported that it was also observed that the Central Government, on the recommendation of the GST Council, had levied 18% GST on construction service (after one third abatement towards value of land, ef....
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....he aforesaid CENVAT/input tax credit availability in the pre and post-GST periods and the demands raised by the Respondent on the ApplicantNo.1 and other home buyers towards the value of construction on which GST liability @ 12% was discharged by the Respondent during the period 01.07.2017 to 31.05.2020, the amount of benefit of ITC not passed on to the recipients or in other words, the profiteered amount comes to 33,35,330/- which included GST. The buyers (of flats sold upto the receipt of the date of Occupancy Certificate and payment made thereon upto 31.05.2020) and unit no. wise break-up of this amount has been given in Annex-22 for Project "SUBURBIO-67 (Suburbio-1)". 27. The DGAP has claimed that The Respondent did not claim to have passed on the benefit of ITC to any of the home buyers, which was corroborated from the home buyers list submitted by the Respondent. Hence it was treated as `NIL" in respect of the Project. 28. The DGAP has also submitted that above computation of profiteering was with respect to 150 home buyers amongst all the customers as on 31.05.2020 in the project "Suburbio-67(Suburbio-1)" in whose case demands had been raised post-GST. As seen from the....
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.....07.2017 to 31.05.2020. 31. In view of the aforementioned findings, it appeared to the DGAP that the provisions of Section 171 (1) of the CGST Act, 2017, requiring that 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", had been contravened by the Respondent in the present case. 32. The above Report of the DGAP was considered by this Authority in its sitting held on 23.02.2022 and it was decided to direct the Respondent and the Applicant No. 1 to file their consolidated written submissions in respect of the report of the DGAP by 15.03.2022. However, the Applicant No. 1 did not file his written submissions. The Respondent has filed his written submissions dated 05.04.2022, vide which he has stated:- i. That Vishal Garg Applicant No.1 and Mrs. Payal Garg had withdrawn their Complaint vide letter dated 13.07.2020 filed against the Respondent. ii. That facts mentioned in Point No. 21 i.e Ratio of Input Tax Credit Pre- GST (April 2016 to June 2017) 3.26% and Ratio of Input Tax Credit Post GST (July 2017-May 2020) 9.89% and Point 24 i.e. Excess Colle....
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....laints included the complaint in respect of Respondent also. Further, on verification of the documents / information submitted by the Respondent from time to time, it had been observed that the Respondent had availed additional benefit of ITC under the GST regime, the benefit of the same had to be passed on to the recipients u/s 171 of CGST Act. Accordingly, notwithstanding the withdrawal of complaint by the above Applicant, the investigation has been carried out in the best interest of upholding the letter and spirit of the provisions of Section 171 of the CGST Act, 2017. b) that the Cenvat Credit of Service Tax paid on input Services from 01.04.2016 to 30.06.2017 and Input Tax Credit under GST for the period 01.07.2017 to 31.05.2020 in respect of the subject project i.e. SUBURBIO -67 (SUBURBIO-I) had been considered from the project wise bifurcation of turnover and CENVAT credit/ITC availed for all the projects as submitted by the Respondent vide Annexure -I appended to letter dated 09.06.2021. Further, Input Tax Credit of VAT for the period 01.04.2016 to 30.06.2017 had been considered as Rs. 3,66,212/- based on the Order No. 886/2016-17 dated 27.02.2020 issued under Har....
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....ich he had submitted that Vishal Garg Applicant No.1 and Mrs. Payal Garg had withdrawn their Complaint vide letter dated 13.07.2020 addressed to the DGAP. In this regard it is to mention that the Applicant No.1 vide his letter dated 13.07.2020, received by the DGAP on 21.07.2020 submitted that ""we had mutually sorted out/ settled all the disputes vide Settlement Agreement dated 13.07.2020. We had nothing left pending on any account whatsoever including GST/VAT towards M/s JMD and fully satisfied with the aforesaid Settlement Agreement. We hereby withdrawal his above cited complaint and further confirm & declare that no amount was pending on any account whatsoever towards M/s JMD Limited including GST/VAT." In this regard, the Authority finds that there is no provision envisaged under the CGST Act, 2017 or the Rules there under to drop verification/Investigation of profiteering once the Complainant/Applicant withdraws his complaint. The same analogy was being followed by the DGAP in all the cases and accordingly the investigation was continued once the recommendations of the State Screening Committee and Standing Committee were received. The Authority finds that the quantum of bene....
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....in the post-GST era has been taken from the home buyers list submitted by the Respondent vide the letter dated 09.06.2021. Therefore, the calculation of the amount of ITC benefit to be passed on to all the eligible flat buyers of Rs. 33,35,330/- was on the basis of the information supplied by the Respondent and hence the amount of profiteering computed by the DGAP is hereby accepted as correct. 39. 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 no reduction in the rate of tax in the post GST period. Hence, the only issue to be examined is as to whether there was any net benefit of ITC with the introduction of GST. On this issue it has been revealed from the DGAP's Report that the ITC as a percentage of the turnover that was available to the Respondent during the pre-GST period (April-2016 to June-2017) was 3.26% and during the post-GST period (July-2017 to May-2020), it was 9.89%. This co....
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.... Mohan 7,873 3. Kapil Maini 9,439 4. Charu Maini 8,885 5. Ashok Kumar Malik & Sushma Malik 17,349 6. Parkash Vanjani & jaya Vanjani 6,630 7. Mohit Kumar Gupta & Monica Gupta 13,744 8. Anuj Yadav 15,517 9. Gurdeep Singh Arora 21,085 10. Karishma Finishers Pvt. Ltd. 35,071 11. Anshu Mahajan 17,748 12. Ramesh Chand Juneja & Aruna Juneja 16,954 13. Sudhir Gupta 36,456 14. Rakesh Arora & Seema Arora 21,062 15. Vivek Tyagi 20,387 16. Prem Lata Dhir 18,749 17. Aditya Karwa 21,063 18. Jagriti Exim Pvt Ltd 2,296 19. Jagriti Exim Pvt Ltd 3,302 20. Jagriti Exim Pvt Ltd 3,690 21. Jagriti Exim Pvt Ltd 4,612 22. Jagriti Exim Pvt Ltd 22,017 23. Dalip Singh 2,14,083 24. Kapil Malik & Ritu Malik 17,457 25. Vikramjeet Singh Dhillon & Ramneek Singh Kochar 20,024 26. ParamJeet Singh Marwah & Manik Gulati 20,966 27. Security Investment Limited 30,040 28. Vinod Kaushal 19,320 29. Capt. Lila Singh Aulakh 12,670 30. Avdesh Chahar & Karan singh Dahiya 52,4....
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....3,755 89. Shammi Khosla 9,157 90. Kuldeep Singh 11,798 91. Kuldeep Singh 26,430 92. Anand Kumar Singhal 25,795 93. Anand Kumar Singhal 10,503 94. Ranjit Singh Jolly & Arvinder Kaur Jolly 3,850 95. Ranjit Singh Jolly & Arvinder Kaur Jolly 4,036 96. Harvinder singh Lamba & Tejinder Lamba 4,711 97. Harvinder singh Lamba & Tejinder Lamba 3,526 98. Tarun Agarwal 23,332 99. Sunder lal 1 23,360 100. Rajesh Khanna & Shashi Khanna 14,408 101. Virender Arora 26,740 102. Parveen Gandhi 12,054 103. Kamal Yadav 23,255 104. Nitin Khandelwal(HUF) 14,397 105. Vijaya Nand Jha 2,185 106. Arun Saroha 13,905 107. Kural Gaur 9,596 108. Vijay Chaurasia 9,602 109. Simran Sethi 8,506 110. Karishma Finishers Pvt. Ltd. 3,185 111. Anshu Mahajan 20,981 112. Harvinder singh Lamba 16.885 113. Vijay Shree Pande 12,853 114. Adarsh Kumar Yadav 11,406 115. Shobha Manga 7,658 116. Shobha Manga 7,732 117. Rajveer Singh 15,640 118. Mithlesh Raghav ....
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....under the provisions of the above Section. Accordingly, notice be issued to him to explain why penalty as prescribed under Section 171 (3A) should not be imposed on him. 46.The concerned jurisdictional CGST/SGST Commissioner is also directed to ensure compliance of this Order. It may be ensured that the benefit of ITC is passed on to each homebuyer as per this Order along with interest @18%. In this regard an advertisement of appropriate size (visible enough to public at imminent page) may also be published by the concerned Commissioner in minimum of two local Newspapers/vernacular press in Hindi/English/local language with the details i.e. Name of builder (Respondent) - JMD Limited, Project- "JMD IMPERIAL SUITS" Location- Gurugram. Haryana and amount of profiteering Rs. 33,35,330/- so that the concerned homebuyers can claim the benefit of ITC if not passed on. Homebuyers 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 Commissioner responsible for compliance of the NAA's order may also be advertised through the said advertisement. Such an advertisement will help ens....