TaxTMI 
TaxTMI 
2022 (8) TMI 43
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....ority vide said Interim Order had directed the DGAP to reinvestigate the matter under Rule 133 (4) of the CGST Rules 2017 on the following grounds/issue ;- (i) During the hearings, the Respondent No. 01 informed that the land-owner, Respondent No, 02 had 35% share in the project and that he was not aware whether the land-owner had passed on the ITC benefit to his customers or not, It was also clear that one of the Respondents i.e. Respondent No. 01, had availed the entire ITC and hence was required to pass on the commensurate benefits thereof to his recipients. It was not clear to what extent benefit woad arise, therefore the computation of the benefit of ITC for the project was required to be re-examined by taking into consideration the Development Agreement dated 05.09.2011 between the Respondent No. 2 and the Respondent No. 1. (ii) The Respondent No. 01 had submitted that there was a difference in ITC figures taken by the DGAP and figures in GSTR-3B Returns in as much as the DGAP had considered eligible ITC for the period July 2017 to August 2018 as Rs,9,99,82.384/- whereas the available ITC was only Rs.7,90,53,619/- as per the GSTR-3B Returns. The said figures....
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....6.2019 and 19.11.2019 to the Authority clarifying the aforesaid submissions of Respondent No. 1. 5. The Authority after carefully examining the DGAP's Report dated 27.02.2019, submissions of the Respondent No. 1 and documents/information placed on record, had remanded the matter back to the DGAP under the provisions of Rule 133 (4) of the CGST Rules 2017, vide Interim Order No. 16/2019 dated 28.11.2019 directing him to further investigate the case on the issues mentioned in paragraph-1. 6. Accordingly the DGAP has submitted instant Report dated 26.08.2020. wherein the DGAP has inter alia stated that:- (a). After receiving reference from the Authority, M/s. Magic Info Solutions Pvt. Ltd. (Landowners) was impleaded as Respondent No. 2 and letters were issued to the Respondent No. 1 and Respondent No. 2 on 11.12.2019, calling upon them to submit the information/ documents required to re-investigate the matter. (b). The Authority vide its order dated 26.08.2020 had approved to revise the period covered by the current investigation i.e. from 01.07.2017 to 30.11.2019. He also reported that the time limit of 03 months to submit his report had been extended from 28,02.2020 to 2....
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....tal A. Number of Units booked as on 30.06.2017 25 61 86 B. Add: Units booked in GST regime till 25.12.2018 2 1 3 C. Total units booked before the date of Occupancy Certificate [(A) + (B)] 27 62 89 D. Unsold Units as on the date of Occupancy Certificate 18 8 26 E. Total Units [C+D] [Respondent No.1's Share] 45 70 115 (iv) The details of turnover in pre-GST period and GST period in table- 'D' below: Table-'D' Project Turnover Pre-GST Regime GST Regime April 2016 to June 2017 (In Rs.) July 2017 to November 2019 (in Rs.) Tower A and Tower L. 56,03,78,200 42,02,96,943 Other Towers (including EWS and Commercial) 1,99,35,84249 35,69,01,909 Total 2,55,39,62,449 777,198,852 1. Total Turnover mentioned above includes the turnover pertaining to landowner. The turnover relating to area developed for landowner has been computed in the proportion of area of Tower A and Tower L. 2. Total Turnover mentioned above includes the turnover pertaining to landowner. The turnover relating to area developed for landowner has been computed in the proportion o....
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....iteering requires the registered person to pass on the benefit available on following grounds: • Reduction in rate of tax on supply of services • Benefit of input tax credit available in GST regime which was not available in pre-GST regime. In the instant case, there was no benefit arising on account of reduction in rate of tax on supply of services. Further, with respect to benefit of input tax credit available, the same was dependent upon various factors such as stage of construction, etc. (c) he has made his estimated computation of additional benefit which has accrued to the Respondent No. 1 in Tower A and Tower L to the tune of 2.25% which has already been passed on to eligible customers of Tower A and Tower L through credit notes or adjustment in tax invoice. (vii) Comparison of ratio of input tax credit to turnovers for pre-GST and post-GST periods is not the correct mechanism for calculation of alleged profiteering amount. In this regard, he submitted that: (a) The method of arriving at profiteering amount by comparing the ratio of input tax credits to the turnovers of Pre-GST and GST period shall never yield the corre....
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....,945 3,14,339 6. ITC Relevant to Turnover (F) 2,86,41,888 2,63,72,219 Ratio of Input Tax Credit to Turnover 5.11% 6.27% Profiteering 1.16% 1. The calculation is based on one-to-one comparison for and Tower A and L. The towers were developed under the area sharing model and therefore the data relating to toe Respondent No. 2's share had also been taken into consideration to make the comparison appropriate and reasonable. 2. This amount reflects the total eligible credit availed by the Respondent No. 1 during the period July 2017 to November 2019. The amount of credit reversed on account of unsold area at the time of issuance of occupation certificate has been deducted to arrive at the amount of eligible input tax credit in hands Respondent No. 1. 3. Total turnover mentioned above includes turnover pertaining to landowner. This based on the facts that the total Credit availed by the Respondent No.1 relates to total area developed (Including area developed for landowner). Accordingly, the component of total saleable area and total area sold relevant to the turnover (as mentioned in row 4 and 5) shall also inc....
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....a pertaining to so as to arrive at an appropriate comparison. 5. Occupancy certificates foe the Tower A Tower L have been issued in the month Of 2018, therefore. the unsold area on date of issuance Certificates have been deducted from the total saleable area. in light of the above calculations, the Respondent No. 1 submitted that in case the above methodology of calculation was adopted for "Tower A and Tower L" then, the additional input tax credit accrued to the Respondent No. 1 is less than the benefit already passed on to Applicant No. 1 in both the scenarios. Accordingly, there was no profiteering in the alleged manner and thus, the present proceedings were liable to be dropped. (ix) In the absence of specified procedure and mechanism of calculation of profiteering, the proceedings are arbitrary and liable to be dropped. In this regard, the Respondent has submitted that:- (a) The CGST Act read with the Rules does not provide the procedure and mechanism of determination and calculation of profiteering. In absence of such calculation and methodology the proceedings are arbitrary and are in violation of principle of natural justice. Accordingly, the investi....
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....ase of a sale of composite packages bearing a singular MRP, the authorities under the Act could not possibly assess the components of such a composite package separately. Such an exercise, if undertaken, would also fall foul of the principles enunciated by the Hon'ble Supreme Court. In this regard, reliance has been placed on the case of Union of India vs. Suresh Kumar Bansal 2017 (4) G.S.T.L. J128 (S.C.), wherein it was confirmed by the Hon'ble Court that explanation added to Section 65(105) (zzzh) of the Finance Act, 1994 vide the Finance Act, 2010 expanding scope of taxability of Construction of Complex intended for sale by builders, was ultra vires as there was no statutory mechanism to ascertain value of service component of subject levy. (f) On the basis of the aforementioned discussions, in the absence of prescribed method/formula for calculation of profiteering, following a method on case-to-case basis was arbitrary and thus, the investigation was liable to be set aside. (x) The investigation could not go beyond the applications submitted by Sh. Vijay Malhotra and Snit. Sunita MaIhotra. In this regard. the Respondent has stated that:- (a) In terms of Se....
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...., penalty, etc. should not be levied and collected from him. It was settled principle of law that an order adjudicating a show cause notice could not travel beyond the scope of a show cause notice. In this regard reliance has been placed on the case of Toyo Engineering India Limited vs. Chief Commissioner, Mumbai 2006 (201) E.L.T. 513 (S.C.) wherein the Hon'ble Supreme Court held that the Department could not travel beyond the show cause notice. The extract of the relevant portion of the judgment has been provided below for quick reference: "Learned counsel for the Revenue tried to raise some of the submissions which were not allowed to be raised by the Tribunal before us, as well. We agree with the Tribunal that the revenue could not be allowed to raise these submissions for the first time in the second appeal before the Tribunal. Neither adjudicating authority nor the appellate authority had denied the facility of the project import to the respondent on any of these grounds. These grounds did not find mention in the show cause notice as well. The Department cannot be travel beyond the show cause notice. Even in the grounds of appeals these points have not been taken." ....
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.... of the Act by the OP, being dehors the directions given to the DG, is ultra vires the scope of investigation deserves to be disregarded." (g) In the light of the aforementioned discussion, the Report should be restricted to the Applicant No, 1 who has filed application to the concerned Committee. 8. The DGAP has further submitted that apart from the above, during the personal hearing held before the Authority, the Respondent No. 1. has submitted:- (a) That the project "Godrej Summit" has 11 towers. Except Tower A and Tower L, Occupancy Certificates have been received for all the other towers in Pre-GST regime itself. (b) That the entire ITC availed by him pertained to total area including the area pertaining to landowner against which he has duly passed on the benefit which has accrued to the Respondent No. 2 pertaining to the area given to landowner. (c) That the DGAP has taken into consideration the amount of GST collected from the homebuyers which the Respondent No. 1 has duly deposited to the Government and the same has not been retained by the Respondent No. 1 with it. Thus, it was irrational to allege that the Respondent No. 1 has profi....
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....t passed on in other projects. e. Different Scenarios for the computation of ratios considering different periods. 11. The Respondent No. I had requested the DGAP to consider all the details/documents/information in a confidential manner in terms of Rule 130 of the Rules. 12. In response to above said letter dated 11.12.2019 and subsequent reminders of the DGAP, the Respondent No. 2 has submitted his reply vide letters/e-mails dated 23.12.2019, 15.01.2020, 08.06.2020 and 12.06.2020 stating that he was a company incorporated under the Companies Act and was owner of the land on which the Respondent No. 2 entered into a Development Agreement with the Respondent No. 1 to develop the project "Godrej Summit" at Setcor-104, Gurugram (Haryana). The project was being developed by the Respondent No. land the Respondent No. 2 has a share of 35% in the total saleable area of the apartments in the project. 13. Vide the aforementioned letters and e-mails, the Respondent No. 2 submitted the following documents /information to the DGAP; a. Copies of GSTR-1 returns for the period July, 2017 to Nov, 2019. b. Copies of GSTR-3B returns for the period July, 2017 to N....
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....f goods nor a supply of services) which reads as "Sale of land and, subject to clause (b) of paragraph 5 of Schedule II, of the Central Goods and Services Tax Act, 2017 as "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". Thus, the input tax credit pertaining to the residential units and commercial shops which were under construction but not sold was provisional input tax credit which may be required to be reversed by the Respondent No. 1, if such units remained unsold at the time of issue of the completion certificate, in terms of Section 17(2) & Section 17(3) of the Central Goods and Services Tax Act, 2017 as Section 17 (2) "Where the goods or services or both are used by the registered person partly for effecting taxable supplies including zero-rated supplies under this Act or under the Integrated Goods and Services Tax Act and partly for effecting exempt supplies under the said Acts, th....
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....e passed on at the level of each supply of Stock Keeping Unit (SKU) to each buyer of such SKU and in case it is not passed on the profiteered amount has to be calculated on each SKU. Therefore, the contention that the profiteered amount should be computed at the entity/group/company level is untenable. Further, the above Section mentions "any supply" i.e. each taxable supply made to each recipient thereby clearly indicating that netting off of the benefit of tax reduction by any supplier is not allowed. A supplier cannot claim that he has passed on more benefit to one customer therefore he could pass less benefit to another customer than the benefit which is actually due to that customer. Each customer is entitled to receive the benefit of tax reduction on each product purchased by him. The word "commensurate" mentioned in the above Section gives the extent of benefit to be passed on by way of reduction in the prices which has to be computed in respect of each supply based on the benefit of input tax credit as well as the existing base price (price without GST) of the supply. The computation of commensurate reduction in prices is purely a mathematical exercise which is bas....
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.... Section 171(1) of the Central Goods and Services Tax Act, 2017 which reads as "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." Thus, the legal requirement is abundantly clear that in the event of a benefit of Input Tax Credit or reduction in rate of tax, there must be a commensurate reduction in prices of the any supply of goods or services. Further, as the law prescribes that benefit of reduction in rate of tax or benefit of increase in ITC should result in commensurate reduction in prices of any Supply and accordingly, he is justified in examining all the supply made by the Respondent No. I beyond the application filed by the Applicant No. 1. (viii) On contention of the Respondent No. 1 that the GST is included in profiteered amount, the DGAP has stated that Section 171 of the CGST Act, 2017 read with Chapter XV of the Rules, requires the supplier of goods or services to pass on the benefit, of tax rate reduction or input tax credit to the recipients by way of commensurate reduction in price. Price includes both the base price and ....
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....ng the benefit of input tax credit required to be passed on. 16. The DGAP has informed that vide e-mails dated 30.07.2020, the Applicant No. 1 confirmed the receipt of two Credit Notes mentioned at S. No. 1 & 2 of above Table-'H' However, the Applicant No. 1 was expecting to receive the benefit in their Bank Account and misunderstood it with the Statement of Account enclosed by him vide email dated 30.07.2020. He further stated that the remaining two amounts of Rs. 50,979/- & Rs, 2,899/- were adjusted in tax invoices no. C10150000911 & CI0150000912 respectively raised on 09.01.2019 but did not appear in the statement of account. The DGAP has also submitted that the Applicant No. 1 submitted that he has not paid the Instalments raised on 09.01.2019 and filed a case in the National Consumer Disputes Redressal Commission (NCDRC) for detective possession offer. The Applicant No. 1 has also pointed out certain deficiencies in the facilities promised and provided by the Respondent No. 1. 17. In this regard, the DGAP has reviewed the statement of account enclosed by the Applicant No. 1 with his mail (also submitted by the Respondent No. 1 in his earlier submissions dated 12.02.2020)....
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....basis of revised information and documents submitted by the Respondent No. 1 and the Respondent No. 2, the DGAP has observed that prior to 01.07.2017, i.e. before the GST was introduced, the Respondent No. 1 was eligible to avail CENVAT credit of Service Tax paid on Services but no credit was available in respect of Central Excise duty and VAT paid on the inputs. However, post-GST, the Respondent No. 1 could avail input tax credit of GST paid on all the inputs and the input services including the sub-contracts and further from the information submitted by the Respondent No. 1 for the period April, 2016 to November, 2019, the details of the input tax credits availed by him, his turnovers from the project "Godrej Summit", the ratios of input tax credits to turnover, during the pre-GST (April, 2016 to June, 2017) and post-GST (July, 2017 to November, 2019) periods, are furnished in Table-'K' below. Table- 'K' (Amount in Rs.) S.No. Particulars April, 2016 to June, 2017 (Pre-GST) July, 2017 to Nov., 2019 (Post-GST) 1. CENVAT of Service Tax Paid on Input Services as per CENVAT Register reconciled with ST-3(A) 3,63,59,885 - 2. Input Tax Credit of VAT Pa....
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....on service, vide Notification No.11/2017-Central Tax (Rate), dated 28.06.2017. Accordingly, on the basis the figures contained in Table-'K' above, the comparative figures of the ratios of input tax credits availed/available to the turnovers in the pre-GST and post-GST periods as well as the turnovers, the recalibrated base price and the excess realization (profiteering) during the post-GST period, are tabulated in Table- 'L.' below: Table- 'L' (Amount in Rs.) S.No. Particulars Post-GST 1. Period A After 01.07.2017 2. Output GST Rate (%) B 12.00 3. Ratio of CENVAT credit/ Input Tax Credit to Total turnover as per table - 'I' above (%) C 5.25 4. Increase In input tax credit availed post-GST (%) D=5.25% less 3.70% 1.55 5. Analysis of Increase in input tax credit: 6. Total Base Price raised/collected during July, 2017 to November, 2019 (Rs) by the Respondent No.1 E 36,05,49,555 7. Total Base Price raised/collected during July, 2017 to November, 2019 (Rs.) by the Respondent No. 2 F 2,64,56,562 8. Total Base Price raised/collected during July, 2017 to November,....
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....d to be passed on and the benefit passed on, is mentioned in Table- 'M' below. Table 'M' Amount in Rs. Sr. No. Category of Customer No. of Units Area (in Sqft) Amount Raised/Received (Post GST) Benefit to be passed on as per Annex-22 Benefit Passed on by the Respondent No. 1 (Excess)/ Shortage of Benefit (profiteering) Remark A B C D E F G H=F-G I 1. Applicant No.1 1 1,816 46,49,912 80,772 1,06,323 (25,600) Excess Benefit passed on. List Attached as Annex-23 2. Buyers other than Applicant No. 1 (Developer) 83 1,67,835 35,58,99,643 61,78,418 84,14,264 (22,35,846) Excess Benefit passed on. List Attached as Annex-23 3. 5 11,000 4,54,22,505 - - Units cancelled as on 30.11.2019. No benefit to be passed on. 4. 26 58,814 - - - - Unsold Units 5. Buyer other than Applicant No. 1 (Land Owner) 4 7,320 2,64,56,562 4,59,286 32,17,256 (27,57,970) Excess Benefit passed on. 6. 21 45,571 - - No Consideration received post-GST 7. 1 1816 48,70,680 - Unit Sold Post receipt ....
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.... L1501 1816 73,56,856 1,27,715 2,959 1,24,756 4. Harpreet Singh L706 1844 1,08,96,300 1,89,160 86,087 1,03,073 Total 4,59,286 97,665 3,61,621 Therefore, the Respondent No. 2 is required to pass on the further benefit of Rs. 3,61,621/- as per above table. (ii) On the issue mentioned at para 1 (ii) it is submitted that the ITC for the period July 2017 to August 2018 as per GSTR-3B Returns was Rs. 9,99,82,384/- whereas the Respondent No. 1 claimed ITC was only Rs. 7,90,53,619/- during this period. The difference of Rs. 2,09,28,765/- (Rs. 9,99,82,384/- less Rs. 7,90,53,619) was due to ITC reversed by the Respondent No. 1 and reported in Output liability of Outward taxable Supply in Table 3.1 in GSTR-3B Return in the month of March, 2018 which the Respondent No. 1 has rectified in his Annual Return GSTR-9 for FY 2017-18 filed on 30.011020. The same has been verified by DGAP from reconciliation of GSTR-3B and GSTR-1 Returns for the month of March, 2018, as well from Annual Return GSTR-9 and the Respondent No. 1 has submitted CA Certificate also in this regard therefore, the difference has been verified and has been rect....
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....Respondent No. 2 directing him to explain why the above said Report should not be accepted and his liability for profiteering should not be determined under section 171 of the CGST Act 2017. In response of the Authority's Notice dated 07,09.2020, the Respondent No. 2 has furnished his reply dated 25.09.2020 to the DGAP's Report dated 26.08.2020 wherein the Respondent No. 2 has inter alia stated that:- (a) His company had entered into a Joint Development Agreement with the Respondent No. 1 for construction of project "Godrej Summit". (b) The land was owned by him and the project was developed by the Respondent No. 1. He had 35% share in the project. (c) At the time of investigation, in the month of April 2019, the Respondent No. 1 had passed on the benefit under GST regime of Rs. 1,38,64,891/-, out of which the benefit amounting to Rs.32,17,256/- was passed on in respect of Tower A and L to 64 units. On the basis of working which was submitted to the DGAP the benefit was also passed on by him to the eligible buyers. However, now after complete working DGAP has worked out that he was supposed to pass on Rs. 4,59,286/- which was based on the working being pr....
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....s were communicated to them. (b). He has prepared the report dated 26.08.2020 on the basis of documents/information submitted by the Respondent No. 1, Respondent No. 2 and the Applicant No.1 during the course of investigation in terms of the provisions of the Section 171 of CGST Act 2017 and the Rules made thereunder. Further with regard to the objection raised by the Applicant No. 1 of cost raise by 7.5% and average profiteering in cases of other builders (published on the Authority's portal) as 7% approx., the DGAP has clarified that the computation of commensurate reduction in prices or profiteering is purely a mathematical exercise which is based on some of the parameters and hence it would vary from project to project and company to company as the facts of each case are different. In one real estate project, date of start and completion of the project, price of the house/commercial unit, mode of payment of price, stage of completion of the project, timing of purchase of inputs, rates of taxes, amount of ITC availed, total saleable area, area sold and the taxable turnover realised before and after the GST implementation would always be different than the other project ....
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....s furnished as below: Table 'I' (Invoices No. CI0150000911 dated 09.01.2019) S.No. Particular Amount as per Agreement Benefit of 2.25% Net Amount 1. Basic Sale Price (BSP) (A) 20,35,736 45,804 19,89,932 2. Car Parking Charges (B) 2,30,000 5,175 2,24,825 3. Preferential Location Charges (C) 45,400 - 45,400 4. Total Charge Amount (D)=(A+B+C) 23,11,136* 50,979 22,60,157 5. CGST+SGST (E) 2,84,708 6. Total Invoice Value (F)=(D+E) 25,44,865 7. As per Statement of Account (G) 25,44,865 8. Difference (H)=(E-G) - Table 'J' (Invoices No. CI0150000912 dated 09.01.2019) S.No. Particular Amount as per Agreement Benefit of 2.25% Net Amount 1. Association Formation Charges (A) 3,000 68 2,953 2. Club Membership Fee (B) 45,000 1,013 43,988 3. Electrification Charges (C) 36,320 817 35,503 4. Power Backup Charges (D) 37,500 844 36,656 5. Legal & Admin. Charges (E) 7,000 158 6,843 6. IFMS (F) 18,160 - 18,....
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....eady submitted various details vide his submissions made before the Authority/the DGAP including the details of benefit passed on by him to the customers, any further submissions would be repetition of earlier submissions. He also requested the Authority to pass an appropriate order after considering his submissions. 33. In view of the objections raised by the Applicant No. 1, during the above said hearing and vide his submissions dated 22.12.2020 and 28.01.2021, the Authority had sought clarifications from the DGAP on the points mentioned below: a. No refund has been received by the Applicant No. 1 from the Respondent No. 1. b. Applicant No. 1 has also claimed that no interest has been paid to him on the amount of ITC benefit by the Respondent No. 1. c. Applicant No. 1 has further claimed that the ITC benefit was computed by the DGAP as 7% vide his Report dated 27.02.2019 whereas it has been computed as 2.25% in the subsequent Report dated 26.08.2020 which raises serious doubts on the computation of the ITC benefit. d. It has also been observed from the Report dated 26.08.2020 of the DGAP that turnovers of the pre and post GST periods of Resp....
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....given in para 24, it is evident that demand of amount itself has been made for the net amount (after adjusting for benefit of credit). Since the demand itself is for the net amount after adjustment, there is no question of further refund of any amount to the Applicant No. 1. Similarly, credit notes (details of which have been given in para 23 of report and accepted by the Applicant No 1) has reduced the amount payable by the Applicant No 1. Therefore, he submitted that there was no need of giving any refund to the Applicant No. 1 and thus allegation of Applicant No. 1 that the amount of benefit has not been refunded is incorrect. (iii). he has passed on benefit of input tax credit to the extent of Rs. 1,06,323/- by way of commensurate reduction in prices in the following manner: • Through issuance of credit note: Rs.52,445/- • Through adjustment in tax invoice: Rs.53,878/- (iv). the list of credit notes and tax invoices along with Statement of Account and Application Form evidencing that benefit of input tax credit has been passed on by him to the Applicant No.1 are furnished to the Authority. In fact, on perusal of the Statement....
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....y been passed to the Applicant No. 1 and other buyers. (ii). reliance on the DGAP report dated 27.02.2019 which is not in existence and rejected by the Authority, is not correct and for this reason itself the allegation of the Applicant No. 1 is not maintainable and deserves to be set aside. (iii). the Applicant No. 1 has challenged the report submitted by the DGAP and DGAP will make submissions in that regard. (iv). it is to be noted that the Applicant No. 1 is making contradictory statement, on one hand Applicant No.1 has alleged that no refund has been received for benefit of input tax credit, on the other hand he has accepted the receipt of credit note in statement of account as confirmed in the Report of the DGAP thus, this allegation of the Applicant No.1 is also completely baseless and deserves to be set aside. (e). The Applicant No. 1 has been creating unnecessary nuisances and making baseless allegations against him since beginning of this project. He also stated that the Applicant No. 1 has raised various disputes against him without any evidence which include collection of Service Tax by him, billing of charges by him as per Builder Bu....
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....2018 pertains to 09 towers (other than A & L). Proportionate ITC pertaining to unsold area of tower A&L was reversed in the GSTR-3B for the month of Dec. 2018 Returns only. (iii). in the present case, it may be noted from Table 'K' of his Report dated 26.08.2020 that he has firstly computed the proportionate CENVAT/ITC on the area sold relevant to the turnover received on such area at S. No. 8 of the Table - 'K' by apportioning the total ITC availed (before reversal on account of unsold units since the total saleable area considered is also without excluding the unsold units on date of receipt of OC) with the area actually sold. Thereafter, the DGAP computed the ratio of CENVAT/ITC to the turnover received by the Respondent No. 1 & Landowner from such sold area. Since, the DGAP has considered the total CENVAT/ITC availed by the Respondent No. 1 (before reversal on account of unsold units) which pertains to the total saleable area of 3,73,153 sq.ft. and later on computed relevant to turnover, therefore he has correctly considered the total saleable area of the entire units. (iv). there are no restrictions in the CGST Act 2017 and the Rules made thereunder w.r.t. av....
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....ll be restricted to so much of the input tax as is attributable to the said taxable supplies including zero-rated supplies". Section 17 (3) "The value of exempt supply under sub-section (2) shall be such as may be prescribed and shall include supplies on which the recipient is liable to pay tax on reverse charge bath, transactions in securities, sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building". From the above, it is inferred that the units sold prior to Completion/Occupancy Certificate would continue to fall within the purview of GST and on all the demands raised by the supplier against such units after receipt of Completion/Occupancy Certificate would attract GST also. Therefore, the ITC available to the supplier can be availed by the supplier at the time of discharging his liability against such units. Further, DGAP has submitted that if the investigation was restricted upto Dec. 2018 then the customers who made payments post Dec. 2018 (i.e. after receipt of GC) and borne the applicable rate of GST @ 12% would be deprived of the benefit of ITC required to be passed on to them under the provisions of Section 171 of the CGST Act 2....
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....bmitted his Report dated 26.08.2020 wherein it was reported that the ITC as a percentage of the total turnover which was available to the Respondent No. 1 during the pre-GST period was 3.70% and during the post-GST period this ratio was 5.25%, as per the Table-K mentioned supra and therefore, the Respondent has benefited from the additional ITC to the tune of 1.55% (5.25% - 3.70%) of the total turnover which he was required to pass on to the flat buyers of this Project. The DGAP has also found that the Respondent has not reduced the basic prices of his flats by 1.55% due to additional benefit of ITC and by charging GST at the rate of 12% on the pre-GST basic prices. Further, the DGAP has submitted that the benefit of Rs. 67,18,426/-was to be passed on by the Respondent to home buyers for the period 01.07.2017 to 30.11.2019 but as per above mentioned 'Table-M', the Respondent has claimed to have passed on the benefit of Rs. 1,17,37,843/- to 84 home buyers (details given in Annexure-23 of the Report dated 26.08.2020) and to the Respondent No. 2 in the form of Credit Notes in respect of 64 Units against his share @ 35% in the flats of towers A & L of the project, and Tax Invoices (as ....
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.... from the aforesaid Report dated 26.08.2020. Such amount inclusive of Rs. 80,722/- from the Applicant No. 1 and Rs. 6637,704/- from 83 other than the Applicant No. 1 and Respondent No. 2. (v). The Authority finds that, the claim of the Respondent No.1 that he had passed on the benefit of Rs. 67,18,426/- to 84 home buyers and the Respondent No. 2 has been verified by the DGAP. As per details of such verification as tabulated in Tables M above, the DGAP has reported that, the Respondent No. 1 has passed on the benefit on account of additional ITC to all the 84 homebuyers as well as Respondent No. 2 through credit notes and on tax invoices. (vi). The Authority finds that, the DGAP has investigated profiteering by the Respondent No. 2 in the latter's role as registered supplier and his liability to pass on the benefit of ITC in terms of Section 171 of the CGST Act, 2017. The DGAP has reported, on verification, as detailed at Table N above that, the amount profiteered by Respondent No. 2 is Rs. 459,286/- in relation to the four units for which demands were raised/advance received during 01.07.2017 to 30.11.2019. On verification, the DGAP has reported that, Respondent N....
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....te Governments or a registered supplier avails benefit of additional ITC as a result of coming in to force of the GST the same have to be passed on by him to his recipients since both the above benefits are being given by the above Governments out of their tax revenue. Further the computation of the profiteered amount is an easy mathematical exercise which can be done by any person who has elementary knowledge of accounts. However, to further explain the legislative intent behind the above provision, the Authority has been authorised to determine the 'Procedure and Methodology' which has been done by it vide its Notification dated 28.03.2018 under Rule 126 of the CGST Rules, 2017 in consonance with the provisions made under Section 171 (1) of the CGST Act 2017, which is very clear in its intent. Therefore, in view of the above, the contention of the Respondent is not sustainable. (ix). The Respondent No. 1 has contended that the investigation could not go beyond the application filed by Applicant No.1. In this regard, the Authority finds that Section 171(1) of the CGST Act, 2017 which reads as "Any reduction in rate of tax on any supply of goods or servic....
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....ax as no tax has been imposed under section 171 of the CGST Act 2017 as such a tax can be imposed under section 9 of the CGST Act 2017. Therefore the law settled in the cases of Toyo Engineering India Limited vs. Chief Commissioner, Mumbai, 2006 (201) E.L.T 513 (S.C) and Reckitt & Colman of India Ltd. vs. Chief Commissioner of Exeise 1996 (88) E.L.T. 641 (S.C.), does not apply in the facts of the instant case. Accordingly, the above contention of the Respondent is incorrect and not tenable. (xi). The Authority finds that, vide Section 112 of the Finance Act, 2019 specific penalty provisions have been added for violation of the provisions of Section 171 (1) which have come in to force w.e.f. 01.01.2020, by inserting Section 171 (3A). Since, no penalty provisions were in existence between the period from 01.07.2017 to 30.11.2019 i.e. the period of investigation, when the Respondent had violated the provisions of Section 171 (1), the penalty prescribed under Section 171 (3A) cannot be imposed on the Respondent retrospectively for such period. 39. As per the findings at paragraph 38 supra, the Authority determines the amount profiteered by the Respondent No. 1, during the p....
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....f the CGST Rues, 2017. The Authority directs the Respondent No. 1 and Respondent No. 2 to comply with these directions within a period of three months from the date of this Order. If such directions are not complied with, such sums shall be collected as per the provisions of the CGST Act, 2017. 41. The Authority as per Rule 136 of the CGST Rules 2017 directs the Commissioners of CGST/SGST Haryana to monitor compliance of this order under the supervision of the DGAP and ensure that the amount profiteered along with interest, as applicable, is passed on to all the eligible buyers by the Respondent No. 1 and 2 as ordered by the Authority. In this regard an advertisement of appropriate size to be visible to the public 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/Supplier- M/s Godrej Project Development Pvt. Ltd. M/s. Magic Info Solutions Pvt. Ltd., Project- "Godrej Summit", Location- Gurugram, Haryana and amount of profiteering i.e. Rs.67,18,426/- and Rs.4,59,286/- so that the concerned homebuyers can claim the benefit of ITC/interest, if not passed on. Homebuyers may also be inform....
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....y (Town and Country Planning) Govt. of Haryana and Haryana RERA for necessary action. File be consigned after completion. Enclosures:-Annexure A in Pages 1 to 2 and Annexure B in Page 1. ============= Document 1 M/s Godre Project Development Pvt. Ltd. ANNEXURE-A S.No. Name of Customer Amount collected during 01.07.2017 GST 12% on amount to 30.11.2019 Actual Amount Paid collected Benefit @ 1.55% was required to be passed on Page 1 to 2 1.55% has Benefit been passed on A L Prashant Kumar Choudhary n D-C 12% E=C+D F-E1.55% G 5.234.734 628168 5.862,902.06 90815 90,874.98 3 Anil Kume hay S Rohit Jal 4348.296 545,794 5394,080 70.958 78558.24 18.577,182 2229,262 201306.444 322.500 322499.00 " Raghar Kahik 14.858857 1783,063 16641,920 257.50 257.949.76 Samir Bhargava 10.797,962 1.295.755 12.093,717 1817,453 18745262 B Poornima Sharma 9.395,90 L127.507 10.523,397 163117 16311265 9 Amit Pisyadarshi 10.305,042 1,212,605 11317-647 175,424 175,423.53 10 Planner Vinum Pe Lad 9.3....
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.... 25,107 25,106.78 42 Ajay Bhart 1.031.405 732016 2,165503 33.565 33,565.30 43 Py Agrawal 1.299310 155,941 1,455,451 22,559 22.559.49 44 Biowa The 1891515 227 222 2,120.737 32871 32.871.42 45 Tal Mala Shukla 1.522.870 182,745 1.705.623 26437 26,437 16 46 Saurav Datta 1.299310 155941 1.455.451 22.559 22,55949 47 aya Tapadar 1,371.969 159,824 1,491,693 23,121 21.121.24 Nisha Gupta 1495638 179477 1.675.115 25.964 25964.21 49 Sulhmani anna 1,495.630 179,477 1675.115 25.964 25.964.28 50 Amy Diam 1393.557 143.226 1336.779 20.720 20,720.08 51 Virwin Securities as Pvt Lad 1,662,493 201,899 1804392 29.208 SZ Nishant Kumar Jha 1682.493 201899 1884392 29.200 29.208.08 33 Suman Balah 1.167,873 140.145 1.300018 20274 20.274.29 54 Shruti Bharad 1.336,401 160,378 1496.809 23.201 23.201.31 55 Praveen Y. Sharma 1336481 160370 1496859 23.201 23.201.31 56 Ships Bharat 1376401 160378 1496,859 23.....