TaxTMI 
TaxTMI 
TaxTMI 
2020 (3) TMI 1409
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....ove Applicant had also alleged that the Respondent had not passed on the benefit of ITC (ITC) availed by him by way of commensurate reduction in the price of the above flat. The aforesaid reference was considered by the Standing Committee on Anti-profiteering, in its meeting held on 11" March, 2019, wherein it was decided to forward the same to the DGAP to conduct detailed investigation in the complaint according to Rule 129 (1) of the CGST Rules, 2017. 2. On receipt of the recommendation from the Standing Committee on Anti-profiteering, the DGAP had issued Notice dated 04.04.2019 under Rule 129 (3) of the above Rules, asking the Respondent to intimate as to whether he admitted that the benefit of ITC had not been passed on to the above Applicant by way of commensurate reduction in the price of the flat and in case it was so, to suo-moto compute the quantum of the same and mention it in his reply to the Notice along with the supporting documents. The Respondent was given opportunity to inspect the non-confidential evidence/information furnished by the Applicant No. 1 during the period between 10.04.2019 to 12.04.2019 in accordance with Rule 129 (5) of the above Rules but the Respo....
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.... with the Applicant. (e) Copies of Balance Sheets for the FY 2016-17 & 2017-18. (f) | Copy of Electronic Credit Ledger for the period from 01.07.2017 to 31.03.2019. (g) CENVAT/ITC Register for the FY 2016-17, 2017-18 and 2018- 19. (h) Details of VAT, Service Tax, ITC of VAT and CENVAT Credit for the period from April, 2016 to June, 2017, for the project "Riddhi Siddhi'. (i) List of home buyers in the project "Riddhi Siddhi" alongwith details of benefit passed on. (j) Copy of RERA Registration Certificate of the Project "Riddhi Siddhi'. (k) Copy of Tran-1 Statement. 7. The DGAP has also submitted that all the documents placed on record were carefully examined by him and he has found that the main issues for determination were whether there was reduction in the rate of tax or benefit of ITC on the supply of construction service made by the Respondent after implementation of the GST w.e.f. 01.07.2017 and in case it was so, whether the Respondent had passed on the above benefits to the home buyers as per the provisions of Section 171 of the CGST Act, 2017 or not. 8. The DGAP has further submitted that the Respondent, vide his letter dated 15.04.2019 had submitted that h....
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....- -- -- 62,437 -- (12,517) 49,830 Grand Total 100.00% 19,98,000 26,536 62,437 69,930 (12,517) 21,44,296 10. The DGAP has also claimed that para 5 of Schedule-lll of the Central Goods and Services Tax Act, 2017, defining 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 para 5 of Schedule II of the Central Goods and Services Tax 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 its first occupation, whichever is earlier'. In the light of these provisions, the DGAP has contended that the ITC pertaining to the units which were under construction but not sold was provisional ITC that would be required to be reversed by the Respondent, if such units would remain unsold at the time of issue of Completion Certificate (CC),....
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....en furnished by the DGAP as per the Table-B given below:- Table-'B' (Amount in Rs.) Sr. No. Particulars Total (Pre-GST) April, 2016 to June, 2017 Taxable Turnover @12% GST (01.07.2017 to 24.01.2018) for flats & (01.07.2017 to 31.03.2019) for Commercial shops Taxable Turnover @ 8% GST (25.01.2018 to 31.03.2019) Total (Post-GST) 1 CENVAT of Service Tax Paid on Input Services used for Commercial Shops (A) 72,73,736 2 ITC of VAT Paid on Purchase of Inputs (B) 43,75,985 3 Total CENVAT/ITC Available (C)= (A+B) 1,16,49,721 4 ITC of GST Availed (D) 74,57,417 2,16,87,719 2,91,45,136 5 Turnover for Residential Flats as per Home Buyers List (E) 48,54,88,000 6 Turnover for Commercial Shops e as per Home Buyers List (F) 9,89,00,982 7 Total Turnover (G)= (E)+(F) 56,43,88,982 2927.37.77 72 46,54,88,000 75,82,25,772 8 Total Saleable Carpet Area (Excluding Balcony Area") (in SQF) (H) 486338 453088 (Residential) 33250 (Commercial) 486338 9 Total Sold Carpet Area (Excluding Balcony Area*) (in SQF) relevant to turnover (I) 479099 45....
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....B 12 12 8 3 Ratio of CENVAT credit/ ITC to Total Turnover as per table - 'B' above (%) C 3.72% 3.72% 3.72% 3.72% 4 Increase in ITC availed post-GST (%) D= 3.72% 4 less 2.04% 1.68 1.68 1.68 1.68 5 Analysis of Increase in ITC: 6 Base Price raised during July, 2017 to March, 2019 (Rs.) E 5,99,93,772 23,27,44,000 46,54,88,000 75,82,25,772 7 GST raised over Base Price (Rs.) F=E*B 71,99,253 2,79,29,280 3,72,39,040 7,23,67,573 8 Total Demand raised G=E+F 6,71,93,025 | 26,06,73,280 50,27,27,040 83,05,93,345 9 Recalibrated Base Price H= E*(1-D) or 98.32% of E 5,89,85,877 22,88,33,901 | 45,76,67,802 74,54,87,579 10 GST @12% or 8% I=H*B 70,78,305 2,74,60,068 3,66,13,424 7,11, 11 Commensurate demand price J=H+H 6,60,64,182 25,62,93,969 49,42,81,226 81,66,39,376 12 Excess Collection of Demand or Profiteering Amount K= GJ 11,28,843 43,79,311 84,45,814 1,39,53,968 14. The DGAP has also observed from Table-'C' that the additional ITC of 1.68% of the turnover should have resulted in commensurate reduction in the base price as well as cum-tax price. Therefore, in terms of Sect....
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....87 7,49,25,0 13,762 12,517 1,245 Further Benefit to be passed on as per Annex-15 2 Other Buyers (Residential) 991 4,52,601 69,74,82,750 12,811,363 1,03,77,154 24,34,209 Further Benefit to be passed on as per Annex-15 Total Residential (A) 992 453088 69,82,32,000 12,825,125 1,03,89,671 3 Commercial Shop Buyers 34 7783 2,52,05,183 4,74,261 14760 4,59,501 Further Benefit to be pass on as per Annex-16 4 Commercial Shop Buyers 42 9523 3,47,88,589 6,54,582 16,44,314 09,89,732 Excess Benefit passed on. List Attached as Annex-17 5 Commercial Shop Buyers 2 682 0 0 59,977 -59,977 No Consideration Paid Post- GST, However, Noticee passed on benefit. List Attached as Annex-17 6 Commercial Shop Buyers 66 15263 0 0 0 0 No Consideration Paid Post- GST and No benefit passed on. 7 Total Residential (B) 144 33250 5,99,93,772 11,28,843 17,19051 Grand Total (C)=(A)+(B) 1,136 486338 75,82,25,772 1,39,53,968 1,21,08,722 17. The DGAP has observed from the Table-'D' that the benefit claimed to have been passed on by the Respondent was less than what he ought to have passed o....
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.... Applicant No. 1 mentioned at Sr. No. 1 of table 'D' involving amount of Rs. 1245/-. (ii) 991 residential flats mentioned at Sr. No. 2 of Table-'D' involving amount of Rs. 24,34,209/- and (iil) 34 commercial shops mentioned at Sr. No. 3 of Table-'D' involving amount of Rs. 4,59,501/-.The DGAP has further claimed that the benefit claimed to have been passed on by the Respondent to the buyers mentioned in column-G of Table-D had already been factored in the calculations and it was found that Section 171 of the Central Goods and Services Tax Act, 2017 appeared to have been contravened by the Respondent, inasmuch as the additional benefit of ITC @ 1.68% of the base price, i.e. Rs 28,94,955/- received by the Respondent during the period from 01.07.2017 to 31.03.2019, had not been passed on by the Respondent to 1026 recipients (992 buyers of residential flats plus 34 buyers of commercial shops). These recipients were identifiable as per the documents provided by the Respondent, giving the names and addresses along with unit no. allotted to such recipients. Therefore, this additional amount of Rs. 28,94,955/- was required to be returned to such eligible recipients. 20. The DGAP has also ....
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....copies of the Ledger Accounts have been verified with the list of 992 home buyers submitted by the Respondent during the investigation of this case. He has further submitted that as per the copies of the Ledger Accounts, the Respondent has already passed on the benefit of Rs. 1,03,89,671/- to 992 home buyers. He has also claimed that in respect of 144 commercial shop buyers, the Respondent has submitted copies of Ledger Accounts in respect of 78 commercial shop buyers only. He has further claimed that as per the copies of the Ledger Accounts, the Respondent has passed on the benefit of Rs. 17,19,051/- to these 78 commercial shop buyers. The DGAP has also stated that out of these 78 commercial shop buyers, he has computed profiteering of Rs. 11,28,843/- in respect of 76 commercial shop buyers only as in respect of remaining 2 shop buyers, there was no receipt of any consideration in the post GST period and accordingly no profiteering could be established. He has further stated that out of the 76 commercial shop buyers, the Respondent has passed on benefit of ITC of Rs. 16,44,314/- to the 42 commercial shop buyers which was Rs. 9,89,732/- in excess, to the actual due amount of Rs. 6,....
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....2/- to his customers required verification from the DGAP. Therefore, the Respondent, vide order dated 09.12.2019 was directed to submit evidence showing that the ITC benefit has actually been passed on by him to all the eligible buyers. In response, the Respondent has filed written submissions dated 09.01.2020 and has also supplied a softcopy of the Ledger Accounts of the flat and shop buyers which were supplied to the DGAP. The DGAP was directed to verify the claim of the Respondent that he has already passed on an amount of Rs. 1,21,08,722/- to the home and shop buyers. 26. The DGAP vide his Report dated 19.02.2020 has submitted that the necessary verification of the data (soft copy) submitted by the Respondent has been done by him. He has also submitted that the copies of the Ledger Accounts have been verified by him with the list of 992 home buyers submitted by the Respondent during the investigation of this case. He has claimed that as per the copies of the Ledger Accounts, the Respondent has already passed on benefit of Rs. 1,03,89,671/- to 992 home buyers. He has also claimed that in respect of 144 commercial shop buyers, the Respondent has submitted the copies of Ledger Ac....
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....The DGAP has also not produced even a single acknowledgement/statement of the buyers obtained/recorded by him to confirm whether the benefit of ITC has been passed on to the buyers or not. In the absence of such acknowledgement/statement the claim of the Respondent that he has passed on the benefit of ITC to his buyers cannot be accepted. 29. Based on the above reasons the Reports dated 16.09.2019 and 19.02.2020 furnished by the DGAP cannot be accepted and accordingly, the DGAP is directed to further investigate the present case under Rule 133 (4) of the CGST Rules, 2017 upto 29.02.2020 or till the date of issue of Completion Certificate, whichever is earlier, on the following issues:- (i) Whether the Respondent was eligible to claim ITC on the VAT which he has paid during the period from April, 2016 to June, 2017 as per the provisions of the Haryana VAT Act, 2003 or not? (ii) | Whether the Respondent was availing benefit of Composition Scheme under the Haryana VAT Act, 2003 or not? (iii) Whether the Respondent was eligible to charge VAT from the flat and the shop buyers under the Haryana Affordable Housing Policy-20137 (iv) Whether the Respondent has collected VAT from th....