TaxTMI 
TaxTMI 
2022 (6) TMI 1075
X X X X Extracts X X X X
X X X X Extracts X X X X
....spondent from the perspective of Section 171 of the CGST Act, 2017. 2. The DGAP vide his Report dated 27.01.2021 has inter-alia submitted the following points:- I. The period covered by the current investigation is from 01.07.2017 to 08.08.2019 i.e. the date when the Respondent received the Occupancy Certificate (00) which was extended in terms of this Authority Order No. 81/2020 dated 10.12.2020. II. As per the directions of this Authority vide Order. No. 81/2020 dated 10.12.2020; the case was to be re-investigated based on the fresh data up to the 00 period i.e 08.08.2019 hence, the Respondent vide letter dated 31.12.2020 was asked to submit documents concerning issues raised in Para 28 of the aforesaid Order. The Respondent submitted his reply vide letters/e-mails dated 08.01.2021, 15.01.2021, and 25.01.2021. The Respondent stated that the Project "Suncity Avenue-102" comprises 761 residential units and 51 commercial shop units. As per the DGAP's report dated 23.03.2020, while computing the profiteered amount the area of residential units only had been considered whereas the area of the commercial shop units had not been taken into consideration. However, in the total i....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Excise Duty paid on the inputs or Service Tax paid on the input services, as per the CENVAT Credit Rules, 2004, which were in force at the material time. However, the Respondent was eligible to avail credit of Service Tax paid on the input services (CENVAT credit of Central Excise Duty was not available) for the commercial shop units sold by him. The Respondent was also eligible to avail ITC of VAT paid on the inputs. Further, post-GST, the Respondent could avail FTC of GST paid on all the inputs and input services including the sub-contracts. From the information submitted by the Respondent for the period April 2016 to 08.08.2019, the details of the ITC availed by them, his turnovers from the project "Suncity Avenue 102' the ratios of ITCs to the turnovers, during the pre-GST (April 2016 to June 2017) and post-GST (July 2017 to 08.08.2019) periods, were furnished as given in table-'A' . Table-A (Amounts in Rs.) S.No. Particulars Total (Pre- GST) April 2016 to June 2017 Total Turnover (Post-GST) July 2017 to 08.08.2019 1. CENVAT of Service Tax Paid on Input Services used for the project (A) - - 2. Input Tax Credit of VAT Paid on Purchase of Inputs (B) 90,3....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to 24.01.2018 25.01.2018 to 08.08.2019 Total 2. Output GST rate B 12% 8% 12%/8% 3. Ratio of CENVAT credit/ ITC to Total Turnover as per table - 'B' above (%) C 5.21% 5.21% 5.21% 4. Increase in ITC availed post-GST (%) D= 5.21% less 2.14% 3.07% 3.07% 3.07% 5. Analysis of Increase in input tax credit: 6. Base Price raised during July, 2017 to 08.08.2019 (Rs.) E 19,22,38,774 59,25,53,793 78,47,92,567 7. GST raised over Base Price (Rs.) F=E*B 2,30,68,653 4,74,04,303 7,04,72,956 8. Total Demand raised G=E+F 21,53,07,427 63,99,58,096 85,52,65,523 9. Recalibrated Base Price H=E*(1-D) or 96.93 of E 18,63,37,044 57,43,62,392 76,06,99,435 10. GST @12% or 8% I=H*B 2,23,60,445 4,59,48,991 6,83,09,437 11. Commensurate demand price J=H+I 20,86,97,489 62,03,11,383 82,90,08,872 12. Excess Collection of Demand or Profiteering Amount K=G-J 66,09,938 1,96,46,714 2,62,56,652 X. The DGAP has reported that the additional ITC of 3.07% of the turnover should have resulted in a commensurate reduction in the base price as well as cum-tax price. Therefore, in terms of Section 171 of the C....
X X X X Extracts X X X X
X X X X Extracts X X X X
..../-. However, this excess benefit claimed to have been passed on to some recipients, cannot be offset against the additional benefit required to be passed on to other home buyers who did not receive the commensurate benefit as each transaction/home buyer was entitled to the commensurate benefit. The excess amount paid to any recipient could only be adjusted against any future benefit that might accrue to such recipients. XIV. The benefit of additional ITC to the tune of 3.07% of the turnover, has accrued to the Respondent post-GST and the same was required to be passed on by the Respondent to his recipients. Section 171 of the CGST Act, 2017 appears to have been contravened by the Respondent, since the additional benefit of ITC @ 3.07% of the base price received by the Respondent during the period 01.07.2017 to 08.08.2019, has not been completely passed on by him. On this account, the Respondent has realized an additional amount to the tune of Rs. 2,62,56,652/- (including GST). It also appears that the Respondent has passed on the ITC benefit of Rs. 2,67,88,794/- to 736 homebuyers as mentioned in above Table-C supra. Further, from the above, it was also observed that the Responden....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e.f. 23.02.2022 and hence the matter was taken up for proceedings vide Order dated 03.03.2022 and the Respondent was given an opportunity of being heard in person on 12.04.2022. 7. In response the Respondent filed his submissions dated 11.04.2022 wherein, he accepted the DGAP's Report dated 27.01.2021 and also attached confirmed sample copies of acknowledgments, no grievance letters, tax invoices cum demand letters issued by the Respondent to the customers, evidencing the passing of profiteering amount (benefit of ITC) to the customers as a suo-moto endeavor to pass on the amount of profiteering to the customers by abiding with Section 171 of the CGST Act, 2017. He further requested that considering his suo-moto action of passing on the profiteered amount (benefit of ITC) to the customers this Authority should conclude the case. 8. We have carefully considered the Report furnished by the DGAP and the clarifications filed by him and the record of the case and we find that this Authority vide its Order No. 81/2020 dated 10.12.2020 had directed the DGAP to further investigate the case till the date of Occupancy Certificate. This Authority finds that vide the earlier Report dated....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 11. From the above discussions and acceptance of the DGAP Report dated 27.01.2021 by the Respondent, the Authority determines that the Respondent has profiteered an amount of Rs. 2,62,56,652/-. Therefore, given the above facts, the Authority under Rule 133 (3) (a) of the CGST Rules orders that the Respondent shall reduce the price to be realized from the buyers of the flats commensurate with the benefit of ITC received by him. The details of the recipients and benefit which is required to passed on to each recipient/homebuyer (including Applicant No. 1) alongwith the details of the unit are contained in the Annexure' A' to this order. The Authority directs that such profiteered amount as determined shall be passed on/returned by the Respondent to the recipients of supply alongwith interest @18% from the date such amount was profiteered by the Respondent uptil the date such amount is passed on/returned to the respective recipient of supply. 12. For the reasons mentioned hereinabove and in the given facts and circumstances and also stated position of law we find that the Respondent has denied the benefit of ITC to the buyers of his flats in contravention of the provisions....