TaxTMI 
TaxTMI 
2022 (5) TMI 957
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....ate 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 indicate the same in his reply to the Notice as well as fu....
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....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 the 29th day of June, 2020, and where completion or compliance o....
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...., 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 dated 09.06.2021 & 25.06.2021 submitted that the project "Suburbio-67" was also known as "Suburbio-1" having total saleable area of 4,23,405 sq.ft. (approx) and total permissible FSI of 3,22,9....
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....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 received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever was earlier". Thus, the ITC pertaining to the residential units whi....
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....AT 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 awarded the work to various sub-contractors and had also purchased certain materials on which credit of VAT was claimed. However, as seen from the Order No. 886/2016-17 dated 27.02.2020 issued Under Haryana Value Added Tax, ....
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.... 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, effective GST rate was 12% on the gross value), vide Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. 24. As per the DGAP on the basis of the figures contained in Table- 'A' above, the comparative figures of ITC availed/available as a percentage of the turnover in the pre-GST and ....
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....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 submissions made by the Respondent, it was observed that the Project "Suburbio-67 (Suburbio-1)" comprised of 694 units in all (Total 254 sold, 440 unsold). Out of which 519 units were under exclusive ownership of the Respondent and the balance units 175 units were under the joint ownership with Mr. Sushil Kumar Daima & Ors. Out of the 694 units in the project, 252 units were sold prior to receipt of OC and 2 units were s....
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....P 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 Collection of Demand or Profiteering Post GST July 2017-May 2020) Rs. 33,53,330/- were not true and fair as per records submitted by the Respondent before the DGAP. iii. That facts as mentioned in Point No. 25 of the Report (F.No. 22011/API/48/2020/1590) dated 26th August 2021 i.e the Input Tax Credit of 6.63 of the turnover should have resulted in commensurate reduction in the basic price as well cum-tax price for the home buyers of the project ....
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.... 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 Haryana Value added Tax, 2003 by the Excise and Taxation Officer-cum-Assessing Authority, Gurugram along with Input Credit project-wise submitted by the Respondent vide Annexures -6 appended to the letter dated 15.01.2021. The DGAP has also claimed that the turnover for the period 01.04.2016 to 30.06.2017 in the pre-GST era and for the period 01.07.2017 to 31.05.2020 in the post-GST era has been taken from the home buyers list submitted by the Respondent vide Annexure-....
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....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 benefit passed on to the Applicant is not mentioned in the Applicant's withdrawal letter. The Standing Committee had forwarded this case with the comments "found to have sufficient and necessary prima facie evidence of profiteering". Hence, despite the withdrawal of complaint by the Applicant, the investigation was carried out by the DGAP in the best interest of upholding the letter and spirit of the provisions of Section 171 of the CGST Act, 2017. Therefore, the contention....
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....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 confirms that, post-GST, the Respondent has been benefited from additional ITC to the tune of 6.63% (9.89%-0.3.26%) of his turnover and the same was required to be passed on to all eligible flat buyers. The DGAP has calculated the amount of ITC benefit to be passed on to all the eligible flat buyers as Rs. 33,35,330/- 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. 40. In view of ....
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....tya 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 52,412 31. Dipti Yadav 2,05,618 32. Hemant Kumar & Surya Kant 20,953 33. Netar Pal 17,573 34. Anil Raghav 18,216 35. Lt. Col. A.S. Sohal 13,042 36. Kiran Bala 1,95,051 37. Sudhanshu Maggon 6,630 38. Navneet Kaur Khanuja 28,914 39. Dinesh Bajaj 22,490 40. Mohan Lal Bajaj 23,225 41. Satish Tanwar 21,876 42. Satish Kumar Gupta 17,558 43. Satish tanwar 20,953 44. Sukhdev Singh More & Preshna More 1,06,863 45. Savita Gupta, Shaurya Gupta & Sanjay Gupta 26,183 46. Savita Gupta, Shaurya Gupta & Sanjay Gupta 25,954 47. Onkar Nath Nagi & Mrs. Birinder Kaur Nagi 26,656 48. Anu Yadav 9,074 49. Naresh Kumar Yadav 28,172 50. D....
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....835 119. Birender Singh 13,042 120 Kamal yadav 18,356 121. Jitender Kumar 7,626 122. Deepa Joshi & Yashika Joshi 14,518 123. Jyoti Sooknundun / Deepa Joshi 11,493 124. ABSS Securitas Pvt. Ltd. 23,992 125. Pankaj Gupta & Vimla Gupta 20,786 126. Pankaj Gupta & Vimla Gupta 48,801 127. Vijay Luxmi 12,054 128. Vijay Luxmi 12,932 129. Manoj Dahiya & Neelam Dahiya 12,774 130. Preeti Kakkar 76,078 131. Meena Kumari 15,134 132. Ishwer Singh 15,134 133. Kirti Gupta & Shashank Goel 13,527 134. Mrs. Chitra Khosla through GPA holder Mr.. Ashwani Kumar Khillan 2,511 135. Parul Khanna Prakash & Param Prakash 13,480 136. Ramesh chand Juneja 10,559 137. Rajesh Kumar Jain (HUF) 8,361 138. Rajesh Kumar 12,054 139. Parkash Vanjani & Jaya Vanjani 7,819 140. Rajeev Kukreja / Amita Kukreja 13,395 141. Alok Verma 2,864 142. Gopal Sharma 8,114 143. Sudershan Narang & R.K. Narang 9,505 144. Arun Grover 9,412 145. Dr. Manisha 9,505 146. Sunil Sapra & Amisha Sapra 3,129 147. Pankaj Sachdeva & Shalu Sachdeva 21,667 148. Manmohan Khanna & Anita Khanna 12,853 149. Prem Lata Dhir 39,184 150. Lokesh Sharma & Soni Sharma ....