TaxTMI 
TaxTMI 
2022 (6) TMI 1163
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....Flat in the "Ridhi Siddhi" project of the Respondent situated at Sector-99, Gurgaon. II. Vide Authority's IO No. 14/2020 dated 19.03.2020, the DGAP Report dated 16.09.2019 was referred back to the DGAP to further investigate the case for the period upto 29.02.2020 or till the date of Occupancy Certificate (OC), whichever was earlier. III. A letter dated 11.05.2020 was issued to the Respondent to submit the documents required for investigation. As complete documents were not submitted by the Respondent even after repeated requests, Summons under Section 70 of the CGST Act, 2017 read with Rule 132 of the Rules were issued on 18.09.2020 to the Respondent to produce the relevant documents. In response to the Summons the Respondent submitted complete documents required for investigation only on 18.02.2021. IV The DGAP has also stated that the period covered by the current investigation was from 01.07.2017 to 29.02.2020. V The Respondent submitted his reply vide letter/e-mail dated 28.07.2020, 05.10.2020, 27.11.2020, 09.01.2021, 11.01.2021, 10.02.2021, 11.02.2021, 18.02.2021 which may be summarized as below :- a. Documents related to ITC register from July, 2017 to March, 2020, det....
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....m the flat and shop buyers under Haryana Affordable Housing Policy, 2013. (iv) Whether the builder had collected VAT from the home buyers or not: DGAP Reply: The Respondent had submitted he had been assessed under the Normal Taxation Scheme and thus, had collected VAT from the customers under the normal taxation scheme. (v) Whether the credit of VAT claimed by the Respondent was in accordance with the provisions of Section 42 of the HVAT, 2003: DGAP Reply: Section 42 of the HVAT, 2003 was applicable in those instances where sub-contractor was appointed to execute a work. In the instant case, the Respondent had not given any evidence of appointment of sub-contractor nor was it reflected in the Assessment Order. Therefore, the provisions of Section 42 of HVAT were not attracted in the present case. (vi) Whether the ITC claimed by the Respondent during pre-GST period had been allowed by the appropriate Assessing Authority as specified in HVAT, 2003: DGAP Reply: The ITC had been allowed by the Assessing Authority, as specified in HVAT, 2003 (vii) Acknowledgement/ statements of at least 20% shop and home buyers was to be verified and DGAP to certify the receipt of benefit ....
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...., 2016 to June, 2017) and post-GST (July, 2017 to February, 2020) periods, was as furnished in Table-A below: Table-'A' (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 29.02.2020) for Commercial Shops Taxable Turnover @ 8% GST for flats (25.01.2018 to 29.02.2020) Total (Post-GST) 1. CENVAT of Service Tax Paid on Input Services used for Commercial Shops (A) 58,10,860 - - - 2. Credit of VAT Paid on Purchase of Inputs (B) 43,75,985 - - - 3. Total CENVAT/ Credit of VAT Available (C)= (A+B) 1,01,86,845 - - - 4. Input Tax Credit of GST Availed (D) - 4,08,84,092 5. Turnover for Residential Flats as per Home Buyers List (E) 46,52,28,900 21,91,69,550 53,31,20,400 75,22,89,950 6. Turnover for Commercial Shops as per Buyers List (F) 8,55,89,765 6,34,64,498 6,34,64,498.00 7. Total Turnover (G)= (E)+(F) 55,08,18,665 28,26,34,048 53,31,20,400 81,57,54,448 8. Total Saleable Carpet Area (Excluding Balcony Area*) (in SQF) (H) 4,86,338 4,53,088 (Residential) 33,250 (Commercial) 4,86,338 9. Total Sold Carpet Area (....
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....%) C 4.71% 4.71% 4.71% 4.71% 4. Increase in ITC availed post-GST (%) D= 4.71% less 1.65% 3.06% 3.06% 3.06% 3.06% 5. Analysis of Increase in input tax credit: 6. Base Price raised during July, 2017 to February, 2020 (Rs.) E 6,34,64,498 21,91,69,550 53,31,20,400 81,57,54,448 7. GST raised over Base Price (Rs.) F=E*B 76,15,740 2,63,00,346 4,26,49,632 7,65,65,718 8. Total Demand raised G=E+F 7,10,80,238 24,54,69,896 57,57,70,032 89,23,20,166 9. Recalibrated Base Price H=E*(1-D) or 96.94% of E 6,15,22,484 21,24,62,962 51,68,06,916 79,07,92,362 10. GST @12% or 8% I=H*B 73,82,698 2,54,95,555 4,13,44,553 7,42,22,807 11. Commensurate demand price J=H+I 6,89,05,182 23,79,58,517 55,81,51,469 86,50,15,169 12. Excess Collection of Demand or Profiteering Amount K=G-J 21,75,055 75,11,379 1,76,18,563 2,73,04,997 XI. The additional ITC of 3.06% of the turnover should have resulted in the commensurate reduction in the base price as well as cum-tax price. Therefore, in terms of Section 171 of the CGST Act, 2017, the benefit of such additional ITC was required to be passed on to the recip....
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....ng in respect of 1,039 units (962 residential flats + 77 commercial shops) where demands had been raised post GST, the ITC as a percentage of turnover would be distorted and erroneous. Therefore, the benefit of ITC in respect of these 62 units and unsold units was not part of present profiteering calculation. XVI. The present investigation computed the profiteering covering the period 01.07.2017 to 29.02.2020. Profiteering, if any, for the period post 29.02.2020 had not been examined. The Respondent had supplied construction services in the State of Haryana only. 3. The above Report was carefully considered by this Authority in its meeting held on 16.06.2021 and a Notice was issued to the Respondent to explain why the Report dated 30.03.2021 furnished by the DGAP should not be accepted and his liability for profiteering in violation of the provisions of Section 171 should not be fixed. Both the parties were given opportunities to file submissions/ hearing on 01.07.2021 & 12.04,2022. The Respondent filed his submissions vide letter 12.04.2022 wherein the Respondent had submitted that he was construction service provider. He had communicated his customers that he will pass on the a....
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....t the aforesaid Input Tax Credit availability post GST and the details of the amount collected from the customers during the period 01.07.2017 to 29.02.2020. The amount of benefit of ITC not passed on to the recipients or in other words, the profiteered amount comes to Rs. 2,73,04,997/- which includes GST on the profiteering amount. Further, The Respondent claimed that he had already passed on substantial amount of GST ITC in accordance with the requirements of Section 171 of the CGST Act, 2017 to the homebuyers/shopkeepers. The Respondent had also claimed that he had passed on the benefit of Rs. 1,29,17,507/- to homebuyers/shopkeepers. 6. This Authority finds that the Respondent vide his letter dated 12.04.2022 has accepted the DGAP's Report dated 30.03.2021 and requested to conclude the case. The Respondent has also claimed that he has passed on major part of profiteered amount i.e Rs. 1,29,17,507/- and he will pass on the remaining ITC benefit soon after the order of this Authority. 7. For the reasons mentioned hereinabove and in the given facts and circumstances and also stated position of law, we find no reason to differ from the Report of the DGAP that the benefit of additi....
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....gly the penalty equivalent to ten per cent of the profiteered amount will be imposed upon him for the ,amount collected after 01.01.2020. However, no penalty shall be leviable if the profiteered amount is deposited/passed on by the Respondent within thirty days of the date of passing of this order by the Authority. 10. 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/shopkeeper as per this Order along with interest @18%. In this regard an advertisement 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) - Pivotal Infrastructure Pvt. Ltd, Project- "Riddhi Siddhi", Location- Gurugram, Haryana and amount of profiteering Rs. 2,73,04,997/- so that the Applicants along with non-applicant customers can claim the benefit of ITC which is not passed on to them. Homebuyers/shop buyers may also be informed that the detailed NAA Order is available on the Authority's website www.naa.gov.in. Contact details of concerned Jurisdictional Commissioner CGST/SGST for comp....