AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (6) TMI 1284
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....tant proceedings since the DGAP's Report dated 23.03.2020 only covers one of the four blocks i.e. Block 'K'. As the Respondent had obtained four separate RERA registrations for his four blocks/towers, he should had maintained separate escrow/bank accounts. In case the Respondent had not complied with the above-mentioned provision of the RERA Act, 2016, then the entire project "Celebrity Gardens" comprising all his blocks/towers, should be considered as a single project for the computation of profiteering, given that the Respondent had been maintaining a common ITC register/ITC ledger for all the blocks of his said project and had been filing common GST Returns for all the blocks/towers of the said project "Celebrity Gardens; Hence, the compliance of the Respondent with the above-referred provisions of the RERA Act, 2016, becomes paramount and need to be examined. In view of this, there arises the need to revisit the investigation to ascertain if the Respondent had passed on the benefit of ITC to the homebuyers of the other 3 towers/blocks of the impugned project by a commensurate reduction in the prices of the residential units supplied by him in terms of Section 171 of the CGS....
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....n Anti-profiteering examined the above application in its meeting held on 13.09.2019 and forwarded the same to the DGAP to conduct a detailed investigation in the matter. b) The DGAP has examined the above application, the replies of the Respondent and the documents/evidence on record. The main issues for determination were whether there was the benefit of reduction in the rate of tax or ITC on the supply of construction service after the implementation of GST w.e.f. 01.07.2017 and if so, whether such benefit had been passed on by the Respondent to his recipients by way of commensurate reduction in prices, in terms of Section 171 of the CGST Act, 2017. c) From the data submitted by the Respondent covering the period April 2016 to September 2019, like the details of the ITC availed by him, the turnovers from the project "Celebrity Garden Block-K", the ratios of ITCs to turnovers during the pre-GST (April 2016 to June 2017) and post-GST (July 2017 to September 2019) periods was calculated, which have been furnished in Table-B below:- Table-'B' (Amount in Rs.) Particulars for the project "Celebrity Garden Block-K" S.No. Particulars Total (Pre-GST) April 2016 to Jun....
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.... No. 34/2020 dated 11.12.2020, referred the matter back to the DGAP and directed to further investigate the present case under Rule 133 (4) of the CGST Rules,2017as per the Paral on pre-page. 3. Accordingly, the DGAP has carried out necessary re-investigation and on conclusion of the same, a report dated 28.01.2020 was sent to the NAA under Rule 133 (4) of the CGST Rules, 2017.The Report dated 28.01.2021, inter-alia contained as under:- a) The Respondent, with reference to para-18 of the Authority Internal Order No. 34/2020 dated 11.10.2020, informed that in pre-GST period from 01.04.2016 to 30.06.2017, there were only three returns of Service tax and total Turnover and Cenvat of the three returns for the period was Rs. 5,79,03,391/- & Rs. 4,31,790/- respectively. The Respondent enclosed the copies of relevant portion of the Service Tax Returns for ready reference and also informed that with respect to post-GST period 01.07.2017 to 30.09.2019, there was in total 28 Returns and the Turnover and ITC was Rs. 10,28,42,414/- & Rs. 1,01,62,617/-respectively. The turnover or Cenvat/Input tax credit given reflects the turnover/Cenvat/Input Tax Credit of particular (availed during the mo....
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....Tax/GSTR 3B) pertains to all the four Blocks of the project "Celebrity Garden". Therefore, the turnover given in the Returns would not match with the turnover calculated in the Investigation Report dated 23.03.2020 of DGAP as the turnover considered by DGAP pertains to demand raised for the block "K" of the project "Celebrity Garden" only, whereas the Turnover given in the Returns represents all the 4 blocks. Similarly, the CENVAT/ITC taken in the Returns would also not match with Investigation Report dated 23.03.2020. d) The DGAP concluded that there was no change in the amount of profiteering of Rs. 1,54,269/- as was reported in DGAP's Investigation Report dated 23.03.2020. 4. A copy of the investigation report dated 28.01.2021 was provided to the Respondent and to the Applicant No. 1 as per the Minutes of the Meeting of Authority held on 03.02.2021 and as conveyed vide letter dated 04.02.2021. The Respondent vide E-mail dated 12.03.2021 submitted that they had produced their documents and records as and when required by the office of DGAP and an amount of Rs. 1,54,269/- that was ascertain finally as profiteering, had been paid by them to their customers after accepting th....
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....f commensurate reduction in prices." It is clear from the plain reading of Section 171 (1) mentioned above 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. The Authority finds 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 0.31%, whereas, during the post-GST period (July-2017 to September, 2019), it was 0.48%. This confirms that in the post-GST period, the Respondent has been benefited from additional ITC to the tune of 0.17% (0.48%-0.31%) of his turnover and the same is required to be passed on by him to the recipients of supply, including the Applicant No. 1. The Authority finds that the computation of the amount of ITC benefit to be passed on by the Respondent to the eligible recipie....
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...., the Authority finds and determines that the Respondent has profiteered by an amount of Rs. 1,54,269/- for the project 'Celebrity Garden Block K' during the period of investigation i.e. 01.07.2017 to 30.09.2019. The above amount that has been profiteered by the Respondent from his Home buyers in the above mentioned project. The claim of their refund along with the interest @18% thereon, from the date when the above amount was profiteered by him till the date of such payment, in line with the provisions of Rule 133 (3) (b) of the CGST Rules 2017, need to be verified by the concerned CGST/SGST Commissionerate. 10. This Authority under Rule 133 (3) (a) of the CGST Rules, 2017 orders that the Respondent shall reduce the prices to be realized from the buyers of the flats commensurate with the benefit of ITC received by him as has been detailed above. 11. It is evident from the above narration of facts that Respondent has denied the benefit of Input Tax Credit (ITC) to the customers/Home buyers in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and he has thus committed an offence under Section 171 (3A) of the above Act and therefore, he is liable for ....