TaxTMI 
TaxTMI 
2022 (7) TMI 698
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....No. BENECIA-4-301 in the Respondents project "Arihant Aanchal", situated at Jaisalmer Bye Pass Road, Near Dalt Bai Circle, Jodhpur, Rajasthan. The Applicant No, 1 had alleged that the Respondent had not passed on the commensurate benefit of ITC to him by way of commensurate reduction in price against payments due to him. 2. The DGAP has reported that the Applicant No 1 also stated that the Respondent was charging 18% GST instead of 12% and taking full credit of Taxes, but did not pass on the benefit of the same to flat buyers under Pradhanmantri Awas Yojna & Mukhyamantri Awas Yojna". Further, the Applicant No. 1 submitted the following documents along with his application In APAF-1.- a) E-mails of correspondence with Respondent requesting to pass on the benefit of ITC b) Copy of Invoices. Demand Letters and receipts. c) Copies of e-mail dated 01.06 2017 sent to CM Rajasthan portal along with copy of call letter dated 30.05.2017 asking for an additional payment of Rs. 7,000/- on each one Iakh rupees after implementation of GST. d) Copy of reply dated 22.02.2016 given by State GST Rajasthan. e) Press Releases dated 06.121017 & 12A 2 201....
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....20, 09.10.2020, 12.10.2020, 24.10.2020, 02.11.2020, 12.11.2020 and 24.11.2020. The replies of the Respondent to the DGAP have been summed up as follows wherein he has stated: (a) That the Respondent was a real estate company with a predominant focus on the affordable housing segment. It had dominant presence in high growth regions like Mumbai MMR (Badlapur, Shil Road. Taloja - Kharghar, Vashi, Navi Mumbal, Panvel, Karjat and Khopoli) and Jodhpur. The Respondent had a history of having delivered more than 8863 homes with about 7.5 mn Sq. ft. of space constructed which came from roughly 50 projects. Currently Respondent had about 13,188 homes under construction with an area of 13.5 mn sq ft under development and there was 16 projects under construction. The Respondent had completely integrated in-house capabilities of Land Acquisition & Procurement, Liaison, Design & Engineering, EPC and Marketing & Sales. It further ensured tight control and quality considerations and the Respondent never compromised on additional features like tiles and fittings etc which were standardised across all projects. It was one of the reasons why customers prefered the Respondent as a builder as ....
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....gned project "Arihant Aanchal Phase-I" consisted of 532 units only having standard size of 900 sq. ft. per unit (Carpet Area of 563.75 sq. ft. + Attached balcony of 44,42 sq. ft + Common area of 291.83 sq. ft.) Further. the Respondent had also informed that the CENVAT/ITC credit availed for the project "Aanchal Phase-l" pertains to 532 Units (developer share) only and therefore no benefit of CENVAT/ITC was required to be passed on to JDA in respect of the same. 7. Further the DGAP stated that vide the aforementioned letters/ e-mails, the Respondent submitted the following documents/information : (a) Copies of GSTR-1 for the period July. 2017 to Sept. 2019. (b) Copies of GTR-3B for the period July, 2017 to Sept, 2019. (c) Copies of ST-3 Returns for the period April, 2016 to June, 2017. (d) Copies of VAT Returns in form 7A, 8A and 10 for the period April, 2016 to June, 2017. (e) Copy of Manual Tran-1 along with copy of Hon'ble High Court of Rajasthan's Order w.r.t. TRAN-1. (f) Tax rates - pre-GST and post-GST. (g) Copy of Audited Balance sheet for FY 2016-17, 2017-18 & 2018-19. (h) Copy of demand lette....
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....it Note No. CN/19-20/46 dated 30.06.2019 amounting to Rs. 6,440/- issued by the Respondent and Applicant No. 1 enclosed a copy of e-mail / letter and invoice from 11.02.2016 to 24.02.2020 including invoices dated 30.08.2017 & 03.10.2017 with Payment Schedule & Brochures and Advertisements which promised facilities with Layout Plan etc., which had been received by him up to date. Further, by issuing such Credit Note, the Respondent had reduced his Output GST Liability and on the other side was not passing on the same benefit of "tax reduction" to the Flat Buyers. b. That Applicant No. 1 also submitted sample copies of correspondence with the Respondent, from March, 2016 to February. 2019, where Applicant No. 1 had requested several times to provide the details of reduction in the prices and pass on the benefit to him. c. The Applicant No, 1 had submitted that the approx. profiteering per unit was Rs. 25,600/- and the project consisted of 2324 units so total profiteering was approx. 5.95 Crores d Applicant No. 1 had also submitted that the Respondent had collected the amount in Non-RERA bank accounts and was not transferring the proper receipts into the RER....
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....ope of the present investigation was limited to the extent of Construction Service supplied by the Respondent in the project "Aanchal Phase-I" 13. The DGAP has further stated that the allegation of the Applicant No 1 with regard to collection of the amount in Non-RERA bank accounts and not transferring the proper receipts in to the RERA Accounts was outside the scope of provisions of Section 171 of the CGST Act, 2017 & the Rules made thereunder. Therefore, the grievance of the Applicant No 1 could not be redressed through anti-profiteering provisions. 14. The DGAP has further reported that a reference can be made to the Para 5 of Schedule-III of the CGST Act, 2017 (Activities or Transactions which shall be treated neither as a supply of goods nor a supply of services) which read 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 read 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....
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....16 to June, 2017 (Pre-GST) July, 2017 to Sept.2019 (Post-GST) 1. CENVAT of Service Tax Paid on Input Services Used (A) 51,79,884 - 2. ITC of VAT Paid on Purchase of Inputs (B) - - 3. ITC of GST Availed (C) 3,00,80,926 4. Total CENVAT/ITC Available (D)= (A+B) or (C) 51,79,884 3,00,80,926 5. Total Turnover as per list of Home Buyers (Net of Cancellation) (E) 23,83,03,466 30,16,15,561 6. Total Saleable Area in Sq. ft.) (F) (532*900 sq. ft.] 4,78,800 4,78,800 7. Total Sold Area (In Sq. ft.) relevant to turnover (G) 2,80,800 3,20,400 8. Relevant ITC [(H)= (D)*(G)/(F)] 30,37,827 2,01,29,342 9. Ratio of CENVAT/ ITC [(I) = (H)/(E)] 1.27% 6.67% 16. The DGAP has further stated that from the above Table-'C', 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 1.27% and during the post- GST period (July, 2017 to September, 2019), it was 6.67%. It clearly confirmed that post-GST, the Respondent had benefited from additional ITC to the tune of 5.40% [6.67% (-) 1.27%] o....
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....d to be passed on by the Respondent to the respective recipients. 18. The DGAP also stated that from the above calculation, it was evident that on the basis of the aforesaid CENVAT/ITC availability in the pre and post-GST periods and the details of the amount raised/collected by the Respondent from the Applicant No. 1 and other home buyers during the period 01,07.2017 to 30.09,2019, the Respondent had benefited by additional amount of ITC, by an amount of Rs. 1,78,32,984/- which included GST @ 12% or 8% on the base profiteered amount of Rs. 1,62,87,241/-. This amount was inclusive of Rs. 34.137/- (including GST on the base amount of Rs. 31,104/-) which was the benefit of ITC required to be passed on to the Applicant No. 1. 19. The DGAP has further reported that on the basis of the details of outward supplies of the Construction Service submitted by the Respondent for the impugned project, it was observed that the said service had been supplied by the Respondent in the State of Rajasthan only. 20. The DGAP has also reported that before concluding the investigation, it was pertinent to mention that the above computation of profiteering was with respect to 356 home buyers fro....
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.... benefit is passed on), only 8 customer replied and confirmed the receipt of benefit passed via Invoices issued by the Respondent. 22. Further the DGAP vide its Report concluded the benefit of additional ITC to the tune of Rs. 1,76,59,634/- (Rs. 1,78,32,984/- less Rs. 1,73,350/-). could not be verified with the Respondent's submission. Therefore, the total benefit of ITC of Rs. 1,76,59,6341- (including amount of Rs. 22,937/-) was required to be passed on to the recipients. 23. The DGAP has also concluded that the benefit of additional ITC to the tune of 5.40% of the turnover, has accrued to the Respondent post-GST and the same was required to be passed on by him to the Applicant No 1 and other recipients. On this account, the Respondent had realized an additional amount to the tune of Rs. 22,937/- (Rs. 34,137/- less Rs 11,200/-) from the Applicant No 1. Further, the investigation revealed that the Respondent was required to pass on the additional benefit of ITC amounting to Rs. 1,76.36,697/- (Rs. 1,77,98,847/- less Rs. 1,62,150/-) to 355 other recipients who were not Applicants in the present proceedings. These recipients were identifiable as per the documents provided by....
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....f Constitution of India. e. That absence of Judicial Member rendered constitution of this Authority against the rule of law and thus took away the independence of this Authority. f. That there could not be a power to regulate prices in a tax enactment. g. That no Methodology has been prescribed for determination as to whether the reduction in rate of tax on the supply of goods or services or the benefit of ITC had been passed on by the registered person to the recipient by way of commensurate reduction in prices. The Respondent in this regard relied upon the following cases:- • Palai Central Bank Ltd. vs. (1984) 150 ITR 539 (SC) • National Mineral Development Corporation vs. (2004) 65 SCC 281 • K.T. Moopil Nair vs. State of Kerala AIR 1961 SC 552; • Rai Ramkrishna vs. State of Bihar 1963 AIR 1667, 1964 SCR (1) 897, • State of A.P. vs. Malta Raja Reddy 1967 AIR 1458. 1967 SCR (3) 28: • Vishnu Dayal Mahendra Pai vs. State of U.P. 1974 AIR 1489, 1975 SCR (1) 376. • D.G. Gose and Co. (Agents) (P) Ltd, vs. State of Kerala (1980) 2 SCC 410. • Larsen & Toubro ....
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....er due to continuous use of inputs/input services for construction; • ITC was an absolute number which would vary as per the Govt. rate policies q. That the objective behind considering the entire period of the project for computation of profiteering was that the ITC and its co-relation with turnover should be assessed at the broader periodic level rather than linking it with a particular period of the project. r. That the methodology to calculate benefit available to the Respondent on the basis of ITC availed was incorrect since the credit availed was a provisional credit and riot the final credit and reversal of credit benefit of which had been passed on to the buyer merely on avarlment would be leading to double jeopardy for the Respondent. s. That Profiteering if at all could be determined, it could only be determined at the completion of the project. t. That no time limit had been prescribed for accrual of benefit for contracts entered into Pre-GST Regime. u. That no reference could be made by the Authority to cause any investigation in respect of profiteering vis-a-vis customers. other than the Applicant No. 1. ....
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.... and all these communications were positive communications and none denied that benefit had not been passed upon. cc. That relying upon the communication through email and that too within a very short span of time when all the details of physical addresses and telephone numbers were available since February 2020 was unjustified. dd. That the DGAP had firstly erred in treating that since email IDs of only 50 customers had been provided, thus benefit to rest of the customers had not been provided and secondly that since confirmation of only 8 customers had been received thus, no benefit had been passed on to rest of the customers. The Respondent could only submit evidence if the DGAP wished to get it confirmed from the third party, then appropriate method had to be used by the DGAP. ee. That conduct of investigation by the DGAP did not mean that the amount had to be passed on to the customers at any cost even if it resulted in double benefit being passed on to them, ff. That DGAP had erred in using third party confirmations against the Respondent without the opportunity of cross examination being given to the Respondent. Further, the Respondent rel....
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....of credit was subject to section 171 of CGST Act or since a condition similar to proviso to Section 140(3) had also not been inserted in Section 16, therefore making the Respondent to pass on the benefit of something which he had earned to the exclusion of others was ultra vires and against the provisions of the Statute and was violative of Article 14 and Article 300A of Constitution of India, mm. That there were many variables which were required to be made constants before arriving at the profiteered amount like price prevailing of the goods/services pre and post GST Regime, Tax Rate prevailing pre and post GST Regime, Consumption of Goods/services vis-a-vis amount collected from customers in the pre and post GST Regime, stage of construction of the township etc. to name a few, which were required to be taken into consideration by the DGAP, however only thing which had been considered was absolute figure of additional ITC which had resulted in distorted calculation of the profiteered amount. nn. That the calculation of the profiteered amount had been conducted as a mathematical exercise by the DGAP ignoring the variables and the constants as narrated above and w....
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....idered by the Standing Committee on Anti-Profiteering in the earlier meetings and was recommended to the DGAP for detailed investigations under the GST Act d. Not to allow further adjournments to the Respondent to file Rejoinder/reply as the Respondent was continuing to do the more and more manipulations of data with taxes (Proof Submitted) and also trying to create artificial evidence and many a times trying to force the Applicant No. 1 through the hardcore persons and had started pressure to surrender the flat and had not yet provided the possession also of the same since the year 2016 in project "Arihant Anchal", and the Applicant No. 1 the Respondent had already given possession to more than 50 families at "Arihant Anchal" then why not to the Applicant No.1. e. The Applicant No. 1 had already submitted written request letter to this Authority as per his letter/submissions dated 21.12.2020 about the "Pressurizations with Arihant Company Management and Hardcore Criminal Persons regarding surrender the same with revert back the grievance applications from all the legible central & state government authorities". In support of the above contentions, Applic....
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....of the Procedure and Methodology' for passing on the benefits of reduction in the rate of tax and the benefit of ITC were enshrined in Section 171 (1) of the CGST Act, 2017 itself which states that "Any reduction in rate of tax on any supply of goods or services or the benefit of ITC shall be passed on to the recipient by way of commensurate reduction in prices." Therefore, Section 171 itself provides the procedure and methodology for determination of the profiteered amount and therefore, no guidance was required to be provided. The Respondent had got benefit of ITC which he was required to pass on It was also submitted that the facts of each case were different so quantum of profiteering was determined by taking into account the particular facts of each case. Hence, there could not be one-size-fits-all mathematical methodology. It was also submitted that the additional ITC which had accrued to the Respondent on account of the implementation of the GST was required to be passed on to the customers, but a straight jacketed approach was not feasible as the facts of each case vary substantially, In one real estate project, date of start and completion of....
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.... methodology. It was also submitted that the DGAP had not adopted any self-derived method for computing the profiteering amount, but had compared the ITC to turnover ratio in pre & post GST periods in the present case which was rational, logical 8i appropriate in terms of Section 171 of the CGST Act, 2017. Further, it was also submitted that the increase in the cost of inputs and input services might be a factor for determination of price but this factor was independent of the output GST rate. As there was no cost escalation clause in the agreement entered by the Respondent with the home buyers, the increase in cost, if any was a kind of business risk which must have been factored in by the Respondent at the time of entering into agreements. Moreover, In order to quantify the benefit of ITC, it was necessary to quantify the credits available to the Respondent in the pre-GST regime and also the credits available in the GST regime. Further. the amount of the additional benefit of ITC required to be passed on, was the amount paid by the customers or flat buyers to the Respondent in the form of GST charged from them which was to be deposited by the Respondent to the G....
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....ds/services pre and post GST Regime, Tax Rate prevailing pre and post GST Regime, Consumption of Goods/services vis-a-vis amount collected from customers in the pre and post GST Regime, stage of construction of the township etc. to name a few, which were required to be taken into consideration, the DGAP has clarified that in terms of provisions of Section 171 of CGST Act, 2017, profiteering was determined with regard to supplies made in GST regime only. However, a comparison between pre-GST actual taxes and the rate of GST had to be made Mn order to determine whether there was any reduction in rate of tax or the benefit of ITC or not on introduction of GST c. For the averment made by the Respondent that calculation of the profiteered amount had been conducted as a mathematical exercise by the DGAP ignoring the variable and the constants and without providing the set of assumptions made by the DGAP while conducting the mathematical exercise. The DGAP has clarified that Section 171 of the CGST Act, 2017 obliges the supplier to pass on the benefit of reduction in rate of tax or the benefit of ITC availed by supplier to the recipients by way of commensurate reduction in prices....
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....justice as the MAP had already prejudged the issue and had come to the conclusion that he had contravened the provisions of Section 171 of CGST Act, the DGAP has refered to the case law of the Hon'ble Supreme Court in the case of SEBI v. Akshya Infrastructure (P) Ltd., (2014) 11 SCC 112 in which it was held that "lt is by now settled proposition of law that mere breach of rules of natural justice is not sufficient. Such Mach of rules of natural justice must also entail avoidable prejudice to the respondent," In the light of the same, it was submitted that there was no violation of principle of Natural Justice or any prejudice had been caused to the Respondent. g. For the Respondent's contention that the DGAP had rejected his contention that benefit of ITC was passed on to the recipients by way of commensurate reduction in prices basis although to the extent of Rs. 78,39,384/- even though all the relevant evidences were submitted by him the DGAP has stated that the concern raised by the Respondent had been addressed in para-21 of the DGAP's Report dated 26.11.2020. It was further submitted that post submission of the Report, 5 more replies were....
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....ller or regulator as it didn't have the mandate to regulate the same. The Respondent was absolutely free to exercise his right to practice any profession, or to carry on any occupation, trade or business, as per the provisions of Article 19 (1) (g) of the Constitution. The Respondent could also fix his prices and profit margins in respect of the supplies made by him. Under Section 171 of the CGST Act, 2017, this Authority has only been mandated to ensure that both the benefits of tax reduction and ITC which are the sacrifice of precious indirect tax revenue made from the kitty of the Central and the State Governments are passed on to the end consumers who bear the burden of indirect tax. The intent of this provision is the welfare of the consumers who are voiceless, unorganized and vulnerable. This Authority is charged with the responsibility of ensuring that the both the above benefits are passed on to the general public as per the provisions of Section 171 read with Rule 127 and 133 of the CGST Rules, 2017. k. For the various contentions raised by the Respondent that there had been no specified guidelines for determination and computation of the benefit required to b....
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....ection 171 of the CGST Act is very much clear, according to which the benefit commensurate to the amount of reduction in rate of tax or benefit of ITC has to be passed on to the recipients by way of reduction in prices. The insertion of definition of the term "profiteered" in Section 171 of the CGST Act, 2017 made vide the Finance (No. 2) Act, 2019 was only clarificatory in nature. n. The contention raised by the Respondent regarding ignoring increase in cost of inputs in the para was wrong and hence denied. In this regard, it was submitted that the increase in the cost of inputs and input services may be a factor for determination of price but this factor was independent of the output GST rate. As there was no cost escalation clause in the agreement entered by the Respondent with the home buyers. the increase in cost, if any was a kind of business risk which must have been factored in by the Respondent at the time of entering into agreements. The Respondent could not claim to set off such increase in his cost with the benefit of ITC which is the sacrifice of precious tax revenue made from the kitty of the Central and the State Governments and required to be passed on to t....
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....on each and every demand raised by him. The Respondent could always make adjustments in case more or less benefit was passed on at the final computation and payment of the benefit. Therefore, these contentions of the Respondent could not be accepted. q. For the contention raised by the Respondent that no reference was made out for other customers, the DGAP has stated that under Rule 129 (2) of the above Rules, the DGAP is required to investigate whether a registered person has passed on the benefit of tax reduction or ITC to the recipients or not and hence during the course of investigation if it comes to the notice that the above two benefits have not been passed on to those recipients who had not filed complaint against the registered person, DGAP is legally bound to investigate the same and bring the facts before the NAA for determination of those benefits to the eligible recipients It is also clear that the above benefit has accrued to the Noticee due to the concession given by the Central as well as the State Government out of the public exchequer, therefore, the DGAP is bound to investigate to ascertain whether the Noticee has misappropriated the amount of ITC which ....
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....022, which was attended by Shri Pramod Agarwal, Applicant No. 1 and Shri Deepak Bholusaria and Shri Arpit Haldia, Chartered Accountants for the Respondent. During the personal hearing the Respondent has re-iterated his arguments based on his written submissions dated 11.04.2021, 25.01.2021 and 15.04.2022. The Applicant No. 1 has also re-iterated his written submissions dated 11.01.2021, 14.06.2021 and 05.04.2022, Further, the Respondent and the Applicant No 1 further requested time till 06.05.2022 to file their consolidated written submissions. Same has been filed by the Respondent vide his email dated 11.05.2022. Vide above submissions, the Respondent has submitted .- (i) That Applicant No. 1 could never be an applicant in the present case as neither any flat had been booked in his name nor had a flat been registered in his name and nor any booking of any sort had been made in his name till now. That the Applicant No, 1 did not have a locus-standi in any manner in the present case to be the Applicant and thus the application shall be treated as null and void. (ii) That "Arihant Anchal Phase-I" consists of 4 Blocks wherein there are total 19 Towers having 532 unit....
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....elf was a proof of the fact that amount had been collected from the flat purchaser after taking into account the anti-profiteering benefit. (vi) That in cases wherein customer canceled the booked flat and the flat was then thereafter booked by the Respondent in the name of new customer, then in such case price was negotiated with the new customer again on the basis of prevailing market considerations and applicable statutory laws therein and it had no link with the price with which the agreement was entered earlier with the customer. (vii) That during the course of proceedings, it was highlighted by the Applicant Na 1 that the Respondent was refusing to collect the amount from him. No amount was to be collected by the Respondent from the Applicant No. 1 and in fact he should not be an applicant in the matter as he had not booked a fiat from the Respondent. The alleged flat had been booked in the name of Smt, Laxmi Devi wherein the liability to pay was outstanding and it was the obligation of Smt. Laxmi Devi towards the company to pay the amount. In the statement, it could be observed that mostly the due amount had been paid regularly till December 2020 an....
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.... 37. On this issue it has been reported by the DGAP as tabulated above 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 1.27% and during the post-GST period (July-2017 to September-2019). it was 6,67%. Hence, according to the DGAP, post-GST. the Respondent has been benefited from additional ITC to the tune of 5.40% (6.67%-1.27%) of his turnover and the same was required to be passed on to the Applicant No. 1 and the other flat buyers. Therefore, the amount of ITC benefit to be passed on to all the flat/shop buyers is Rs. 1,78,32,984/-. 38. The Respondent has raised several contentions in his support and the findings of the Authority are as under:- 38.1 The Respondent has raised the contention that provisions of Section 171 were violative of Article 14 of Constitution of India and that absence of Judicial Member rendered constitution of this Authority against the rule of law and thus took away the independence of this Authority. The above contention of the Respondent is incorrect as this Authority has been constituted under Section 171 (2) of the CGST Act, 2017, The Parliament, the Stat....
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....e burden of indirect tax. The intent of this provision is the welfare of the consumers who are voiceless. unorganized and vulnerable. This Authority is charged with the responsibility of ensuring that both of the above benefits are passed on to the general public as per the provisions of Section 171 of the CGST Act, 2017 read with Rule 127 and Rule 133 of the CGST Rules, 2017. 38.4 The Respondent has contended that Rule 126 of CGST Rules. 2017 suffered from the vice of excessive delegation to the extent that it empowered the National Anti-Profiteering Authority to determine methodology and procedure. The Respondent has also claimed that the methodology adopted for computing profiteering amount by the DGAP was arbitrary and same was evident from the DGAP's Report itself. In this regard, the Authority finds that, the main contours of the 'Procedure and Methodology. for passing on the benefits of reduction in the rate of tax and the benefit of ITC are enshrined in Section 171 (1) of the CGST Act, 2017 itself which states that "Any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of comm....
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....an be fixed for determining methodology to compute the benefit of additional ITC which would be required to be passed on to the buyers of such units. Further, the facts of the cases relating to the Fast Moving Consumer Goods {FMCGs), restaurants, construction and cinema houses are completely different and therefore, the mathematical methodology employed in the case of one sector cannot be applied in the other sector otherwise it would result in denial of the benefit to the eligible recipients. Moreover. both the above benefits have been granted by the Central as well as the State Governments by sacrificing their tax revenue in the public interest and hence the suppliers are not required to pay even a single penny from their own pocket and hence they have to pass on the above benefits as per the provisions of Section 171 (1). Hence, the Authority finds that, the above contention of the Respondent is not sustainable 38.5 The Respondent also contended that the entire exercise of not adopting like for like comparison and adopting of average method by the DGAP was arbitrary and in absence of specific method prescribed, used estimates for arriving at the benefit to be passed on by ....
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....ces or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices." It is dear from the perusal of the above provision that passing of the additional benefit of ITC to the recipients of service which is accruing to the Respondent does not mean additional amount paid towards GST. 38.7 The Respondent also contended that the definition of Profiteering and ignoring increase in cost of inputs while arriving at the profiteered amount was incorrect. In this regard it is to mention that 'Profiteering' has been defined in the CGST Act as an Explanation to Section 171 which was inserted in the Statute vide Section 112 of the Finance Act, 2019 (No, 2) which came into force only w.e.f. 01.01.2020. Further, the Respondent has cited the definitions of 'Profiteering' from the Black's Law Dictionary in his support. However, it would be worthwhile to mention here that Section 171 of the CGST Act is very much clear, according to which the benefit commensurate to the amount of reduction in rate of tax or benefit of ITC has to be passed on to the recipients by way of reduction in prices. The insertion of definition of the term ....
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....T Act, 2017. 38.9 The Respondent also contended that Profiteering if at all could be determined, it could only be determined at the completion of the project and co-relation with turnover should be referred on a broader periodic level and considering only part of the period might result in skewd results. In this connection, the Authority finds that, the main contours of for passing on the benefits of reduction in the rate of tax and the benefit of ITC are enshrined in Section 171 (1) of the CGST Act, 2017 itself which states that "Any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices." The Respondent has got benefit of ITC which he was required to pass on. The details of the ITC accrued, GST payable and the project wise Cenvat / Input tax accounts were required to be maintained by the Respondent under the extant Rules pre / post GST. The Respondent should passed on the benefit of ITC on provisional basis as he was availing ITC every month which he has not done, The Respondent can simply not ask his homebuyers to wait for the benefit until the proj....
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....of Section 171 of the CGST Act. 2017. 38.12 The Respondent has contended that provisions of Section 171 are not applicable for fresh contracts entered after 01st July 2017. In this regard the Authority finds that the Respondent did not submit any documentary evidence to substantiate that the prices offered to the customers booking flats post July, 2017 were after adjusting/giving benefit of ITC consequent to introduction of GST. During the course of investigation by the DGAP and also during confirmation of the same from the homebuyers who booked their flats post GST. The above claim has not been established, Thus the contention of Respondent that the booking made after introduction of GST needs to be excluded from computation of profiteering is not sustainable. 38.13 The Respondent has claimed that that he has indeed passed on the benefit of ITC to his customers. He has found fault with the methodology of verification adopted by the DGAP. The Authority finds that, 42 customers out of 50 customers to whom verification email were sent did not reply to the said emails: and in 30 cases out of 298, the name mentioned in the List of Home Buyers were not matching with the copies of ....
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....e-2017) was 1.27% and during the post-GST period (July-2017 to September-2019), it was 6.67%, This confirms that, post-GST, the Respondent has been benefited from additional ITC to the tune of 5.40% (6.67%-1.27%) of his turnover and the same was required to be passed on to the Applicant No. 1 and the other homebuyers/shop buyers/customers. The Authority determines the amount profiteered by the Respondent for the Project Arihant Anchal Phase I, during the period 1.07.2017 to 30.09.2019 as Rs. 1,78,32,984/-. Therefore, the amount of ITC benefit to be passed on by the Respondent to all the homebuyers/shop buyers/customers is Rs. 1,78,32,984/-. This amount is inclusive of Rs. 34,137/- (including GST on the base amount of Rs. 31,104/-) which is the benefit of ITC required to be passed on with respect to Flat no. 4-301 in Tower Benicia which has been agitated by the Applicant No. 1. 41. The above amount of Rs. 1,78,32,984/- (including 12% GST) that has been profiteered by the Respondent from his homebuyers/shop buyers/customers, including Applicant No. 1, shall be refunded by him, along with interest @18% thereon, from the date when the above amount was profiteered by him till the dat....
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..... Name of builder (Respondent) - M/s Arihant Supersturctures Limited, Project- "Arihant Aanchal Phase 10, Location- Jaisalmer Bypass Road, Near Dali Bai Circle, Jodhpur, Rajasthan and amount of profiteering Rs. 1,78,32,984/-, so that the Applicant No. I along with Non-Applicant homebuyers/shop buyers/customers can claim the benefit of ITC which is not passed on to them. Homebuyers/shop buyers/customers may also be informed that the detailed NAA Order is available on Authority's website www.naa.gov.in. Contact details of Jurisdictional Commissioner CGST/SGST who is responsible for compliance of the NAA's order may also be advertised through the said advertisement. 47. The concerned jurisdictional CGST/SGST Commissioner shall also submit a Report regarding compliance of this order to the Authority and the DGAP within a period of 4 months from the date of receipt of this order. 48. Further, the DGAP is also directed to monitor the compliance of the order by the concerned jurisdictional CGST/SGST Commissioner. 49. The present investigation has been conducted up to 30.09.2019 only. However, the Respondent is liable to pass on the benefit of ITC which would become availa....
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....escribed under Rule 133 (1) of the CGST Rules, 2017. 52, A copy of this order be sent to the Applicant No 1, the Respondent, Commissioners CGST/SGST Rajasthan, the Principal Secretary (Town and Country Planning), Government of Rajasthan as well as Rajasthan RERA free of cost for necessary action. File of the case be consigned after completion. Annexed : Annexure 'A' in Pages 1 to 8 ============= Document 1 Annexure-'A' Pramod Agarwal vs M/s. Arihant Superstructures Limited Unit S.No. Name of Customer Further Profiteering Amount to be pass on No. (in Rs.) 1 Mr. Sampatial Mewara (Ph-2) A1-101 69397.17 2 Mr. Rajesh Sharma S/o Mr. Shree Kishan A1-103 Sharma 39507.96 3 Mrs. Kavita Sharma W/o Mr. Rajesh Sharma A1-104 39160.72 4 Mrs. Deepika Gehlot W/o Mr. Ram Kishore A1-201 Gehlot(ph-2) 31866.05 5 Mrs. Pinky Bohra W/o Mr. Dhanraj Bohra A1-203 35893.07 6 Mrs. Sukhi Devi Patel A1-303 31069.40 7 Ganpat Soni A1-402 64528.75 8 Mr. Shyam Sunder Soni S/o Mr. Bhanwar Lal A1-501 Soni 30481.92 9 Mr. Ramesh Kumar S/o Mr. Dhira Ram A1-502 352....
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....r A4-304 15240.96 Page 1 of 8 N Pramod Agarwal vs M/s. Arihant Superstructures Limited 48 Mrs. Shanti Devi Jain A4-403 15240.96 49 Mr. Kamal Jhawar A4-503 15240.96 50 Mr. Kamal Jhawar A4-504 15240.96 51 Mrs. Santosh Scni W/o Mr. Mahavir Soni A4-602 19474.56 52 Mr. Deepak Kumar Hassani A4-603 15240.96 53 Mr. Deepak Kumar Hassani A4-604 15240.96 54 Mrs. Pramila Purohit(Ph-2) A4-703 65679.47 55 Mr. Sunil Kumar Jangid B1-101 23844.24 56 Mr.Manoj Bhati B1-102 22589.28 57 Mr. Amit B1-103 22589.28 58 Mr.Tara Shankar Sharma S/o Mr. Bahrang Lal Sharma B1-201 23844.24 59 Mr. Tarun Satyani S/o Mr. Bhagwan Satyani B1-302 23844.24 60 Mr. Vikesh Satyani S/o Mr. Bhagwan Satyani B1-304 23844.24 61 Mr. Bhupesh Tak S/o Mr. Brijmohan Tak B1-401 47799.07 62 Mr. Mohammed Aslam S/o Mr. Mohd. B1-403 Ashfaque 63 Mr. Abhinav Vyas 22589.28 B1-404 23844.24 64 Mr. Arun kumar Agarwal B1-501 22589.28 65 Mr. Vishal Chhajer S/o Mr. Madan Lal 81-502 Chhajer 22589.28 66 Mr. Virdhichand Sutha....
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....atia B3-603 89623.26 106 Mr. Dilip Kumar Saini 83-604 103284.72 107 Mrs. Jamuna Devi B3-702 41484.96 108 Mr. Chetan Bhatia B3-703 95598.14 109 Mr. Ankur Bhatia B3-704 68113.68 110 Mrs. Nilam Bhati 111 Mrs. Parvati Sharma 112 Mrs. Anita Yadav 113 Mrs. Anil Yadav B4-101 89623.26 B4-102 34136.64 B4-103 34136.64 B4-104 34136.64 114 Mr. Manoj Bohra B4-201 34136.64 115 Mrs. Pushpa Sancheti w/o S.M.Sancheti B4-202 34136.64 116 Mrs. Ratra Bissa W/o Sachitanand B4-203 91173.70 117 Mrs. Pinky Jain W/o Mr. Nikhil Kumar Jain 84-204 34136.64 118 Mrs. Laxmi Devi B4-301 34136.64 119 MR. Alok Jalani B4-302 34136.64 120 Mrs. Nirmal Rajpurohit W/o Mr. B4-303 V.C.Rajpurohit 119795.52 121 Mrs. Neelam Purohit & Mr. Kamlesh Purohit B4-304 34136.64 122 Miss Farzana Tabassum D/o Late Mr. M B4-401 Hussain 38521.44 123 Mr. Umesh Raichandani (Ph-2) B4-402 90773.98 124 Mis. Santosh Vyas D/o Mr. Shiv Prasad B4-403 Purohit 34136.64 125 Mr. Natwar Vyas B4-404 33864.48 126 Mr. Kailash Chandra Ga....
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....u Dutt Harsh 85-703 89035.20 B6-101 44906.40 B3-102 44906.40 162 Mr. Pankaj Pareek S/o Mr. Sanjeev Pareek B6-104 131569.92 163 Mr. Sanjay Rankawat S/o Mr. Suresh B6-201 Chandra Rankawat 44906.40 164 Mr. Deepak Rankawat Mr. Suresh Chandra Rankawat B6-202 44906.40 165 Mrs. Rupal Agarwal B6-203 51116.37 166 Mr. Bhuvaneshwar raj Mehta B6-204 137052.00 167 Mr. Gajraj Jain B6-301 73483.20 168 Mr. Jitendra Saxena 86-302 112237.36 169 Mrs. Vishwa Shah W/o Mr. Priyesh Mohnot B6-303 131569.92 170 Mr. Raja Babu Sharma s/o Mr. Shambhoo Lal B6-401 Sharma 44906.40 171 Mrs. Rekha Bhandari W/o Mr. Sanjay B6-402 Bhandari & Mr. Sanjay Bhandari S/o Mr. P.R.Bhandari 49593.60 172 Mrs. Shalini Shrivastava w/o Mr. Santosh B6-403 Srivastava 46539.36 173 Mr. Ajay K Purohit 86-404 44906.40 174 Mrs. Monika Sankhla W/o Mr. Ajit Singh B6-501 Sankhla 44906.40 175 Mr. Rohit Soni S/o Thakur Das Soni B6-502 44906.40 176 Mr. Jagdish Chhajer S/o Mr. Nemichand B6-503 Chhajer 44906.40 177 Mr. S....
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....atyveer C1-203 Sharma 15785.28 N 215 Mrs. Rekha Taparia w/o Sandeep Tapana 01-01 15240.96 216 Mrs. Surekha Taparia W/o Mr. Sudhir Taparia C1-403 15240.96 217 Mrs. Rajkumari Taparia W/o Mr. Jugal Taparia 15240.96 218 Mr. Jiten Hassani 21-501 15240.96 219 Mrs. Vanita Hassani 01-502 15240.96 220 Mrs Shikha Hassani C1-50 15240.96 221 Mrs. Shobha Mohnot W/o Mr. Narendra Singh C1-601 Mohnot 15240.96 222 Mr. Rajesh Chand Mehta S/o Mr. Govind C1-602 Chand Mehta 15240.96 223 Rakesh joshi 01004 48755.52 224 Mr. Abdul Munaf S/o Mr. Abdul Salam C2-101 22861.44 225 Mrs. Kalpi Mathur W/o Mr. Abhinav Mathur C2-102 28039.91 226 Mr. Bhanwar Lal Paliwal S/o Mr. Prabhudayal C2-103 Paliwal 22861.44 227 Mr. Ravindra Bhati C2-104 22861.44 228 Mrs. Rajani Mathur W/o Mr. Ramesh Mathur C2-202 22861.44 220 Mrs. Shashi Choudhary W/o Mr. R.K.Jain C2-203 22061.44 230 Mr. Dilip kumar Soni C2-302 26671.68 231 Mr. Ramsingh Sisodiya C2-303 22861.44 232 Mr. Mehboob C2-401 5539.70 23....
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....pal Sharma 33242.40 268 Dr. Ashok Kumar Bohra S/o Mr. Amar Dutta D2-201 Bohra 33242.40 269 Mr. Krishna Kumar Bohra S/o Mr. Ashok Kumar Bohra D2-202 33242.40 270 Mrs. Premlata Purohit D2-203 33242.40 271 Mrs. Vijaylaxmi W/o Mr. Govind Raj D2-204 33242.40 272 Mrs. Preeti devi W/o Suresh Bothra D2-301 33242.40 273 Mrs. Manju Devi W/o Ramesh Kumar D2-302 33242.40 274 Mrs. Nandani Doshi W/o Mr. Vikas Doshi D2-303 33786.72 275 Mrs. Kalpana Dosi W/o Mr. Rakesh Dosi D2-304 33786.72 276 Mr. Mohit Loonkaran Bothra D2-401 33242.40 277 Mrs. Nikita Bothra D2-402 33242.40 278 Mr. Anu Daga D2-403 35384.58 279 Mrs. Monika Raneja W/o Mr. Arjun Raneja D2-404 33242.40 280 Mr. Vijay Kumar D2-501 33242.40 281 Mr. Amit Jain D2-502 37859.40 282 Mrs. Meena Suthar W/o Mr. Khivraj Suthar D2-503 127008.01 283 Mr. Ajay Madhan D2-504 80889.84 284 Mrs. Sweta Solanki W/o Mr. Arvind Bhati D2-601 80889.84 285 Mr. Babulal Dosi S/o Mr. Asu Lal Dosi D2-602 33242.40 286 Mrs. Neetu Bothra W/o....
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.... Mr. Sanjay Kumar Gupta S/o Mr. Rajendra D4-203 Kumar Gupta & Mrs. Shivani Gupta D/o Mr. Sanjay Kumar Gupta 56498.53 322 Sanyukta Gupta D/o Mr. Prem Kumar Gupta D4-204 48333.50 323 Mrs Pallavi Sethi W/o Mr. Manjeet Sethi D4-301 138422.52 324 Mrs. Kusum Bhandari & Mrs Leena Bhandari D4-302 39357.36 325 Mr. Pankaj Jain D4-303 39357.36 326 Mr. Gautam Jain S/o Late Gyan Chand Jain D4-304 39070.08 327 Mr. Hitesh Karmanchandani S/o Mr. D4-401 Devananad Karamchandani 39357.36 328 Mr. Rohit Arora s/o Mr. Nand Kishore Arora D4-402 39357.36 329 Mrs. Saraswati Rankawat W/o Mr. Virendra D4-403 Sharma & Mr. Virendra Sharma S/o Late C.D.Sharma 39357.36 330 Mrs. Priti Vyas W/o Mr. Manish Vyas D4-404 43500.24 331 Ms. Divya Kabra D/o Mr. Mahendra Kabra D4-501 39357.36 332 Mrs. Renu Kabra D4-502 39357.36 333 Mrs. Manila Arora & Mr. Deepak Arcra D4-503 43500.24 334. Mr. Sandeep Dosi c/o Vishal Dosi 04-504 41178.24 335 Mr. Rameshwar Sharma 04-601 31069.40 336 Mr. Deepak Mehta D4-603 39357.36 337 ....