TaxTMI 
TaxTMI 
2022 (8) TMI 95
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....eing executed in Gurgaon, on introduction of Goods & Service Tax (GST) w.e.f. 01.07,2017, in terms of Section 171 of the CGST Act, 2017. 2. Vide the above mentioned Report dated 26.02.2021, the DGAP had stated that:- a. The aforesaid application was examined by the Standing Committee on Anti-profiteering and upon being prima facie satisfied that the Respondent has not passed on the benefit of ITC, the same was forwarded to the DGAP to conduct a detailed investigation in the matter. Upon receipt of the above reference on 06.05.2020, Investigation was initiated against the Respondent to collect evidence necessary to determine whether the benefit of ITC had been passed on by the Respondent to the Applicant No. 1 in respect of construction service supplied by the Respondent or not. b. A Notice under Rule 129 of the CGST Rules was issued by the DGAP on 02.06,2020, calling upon the Respondent to reply as to whether he admitted that the benefit of ITC had not been passed on to the Applicant No. 1 by way of commensurate reduction in price and if so, to suo-moto determine the quantum thereof and indicate the same in his reply to the Notice as well as furnish all support....
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....l Homes". vii. Cenvat/Input Tax Credit Register for the FY 2016-17, 2017-18, 2018-19 and for the period April, 2019 to April, 2020. viii. List of home buyers in the project "The Peaceful Homes" along with details of benefit passed on, ix. Brief profile of the Respondent x. Details of applicable tax rates, Pre-GST and Post-GST. xi. Status of Project as on 30.04.2020. xii. Copy of Occupancy Certificate. h. The Respondent informed that all the documents except related to Applicant No. 1 like ledger, demand note, agreement might be treated as confidential, In terms of Rule 130 of the Rules. i. Vide e-mail dated 19.02.2021 an opportunity was given to the Applicant No. 1, to inspect the non-confidential documents/reply furnished by the Respondent on 22.02.2021 and 23.02,2021. The Applicant availed of the opportunity and visited the DGAP on 22.02.2021 and inspected the non-confidential documents. j. 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 para....
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....etails of the ITC availed by him, his turnover from the project The Peaceful Homes" and the ratio of ITC to turnover, during the pre-GST (April, 2016 to June, 2017) and post-GST (July, 2017 to April, 2020) periods, has been furnished by the DGAP in Table-A below:- Table 'A' Amount In (Rs.) Sr.No Particulars Total (Pre-GST) April, 2016 to June, 2017 Taxable Turnover (July, 2017 to April,2020) 1. CENVAT of Service Tax Paid an Input Services used for flats (A) 4,10,40,510 - 2. Input Tax Credit of VAT Paid on Purchase of Inputs (B) 56,71,928 - 3. Input Tax Credit of GST Available (C) - 12,09,22,355 4. Total CENVAT/Input Tax Credit Available (D)= (A+B or C) 4,67,12,438 12,09,22,355 5. Turnover for Flats as per Home Buyers list (E) 60,63,62,183 1,49,20,15,805 6. Total Saleable Area (In SQF) (F) 7,48,800 7,48,800 7. Total Sold Area (In SQF) relevant to turnover (G) 3,21,780 5,01,280 8. Relevant ITC [H)=(A+B or C )*(G)/(F)] 2,00,73,622 8,09,50,799 Ratio or ITC Post-GST [(I) (H)/(E)] 3.31% 5.42% l. It was dear from the above Table-A that the ITC as a pe....
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....nefit claimed to has been passed on by the Respondent to his homebuyers, the Respondent had provided the details of benefit of ITC passed on to individual homebuyers separately for all the buyers and claimed that he had passed on ITC benefit of Rs 5,15,80,785/- as indicated in the list of home buyers. The DGAP had cross checked the details given in the home buyers' list with the soft copies of documentary evidences (issued to homebuyers) submitted by the Respondent and it was noted that, 250 units were booked by the Respondent before getting the Occupancy Certificate and the Respondent had passed on the ITC benefit of Rs 5,15,80,785/-. p. In order to cross check the claim of the Respondent, the DGAP had sent e-malls to the 150 buyers picked up randomly. Out of which, 15 buyers including the Applicant No. 1 gave confirmations that he had received benefit of ITC as claimed by the Respondent, which was about 6% of the total number of buyers to whom the ITC benefit had been claimed to be passed on by the Respondent. 01 buyer had responded in the negative and no reply had been received from remaining buyers. Since the percentage of confirmation received through e-mail was l....
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....uyers. Thus, the profiteered amount was to be passed on to 246 (250-4) buyers including the Applicant No. 1. In respect of 11 buyers who confirmed passing on benefit of 1TC over e-mail, the Respondent had actually passed on excess benefit (Row No. 2 of Table-C). Hence the Respondent was still required to pass on benefit to 235(246-11) buyers amounting to Rs, 3,43,30,653/- {35259318-(458371+470294)} including GST. r. On the basis of the details of outward supplies of the construction Services submitted by the Respondent, it was observed that the Respondent Is providing his services in the State of Haryana only. s. In the post-GST period, the benefit of additional ITC to the tune of 2.11% of the turnover was accrued to the Respondent and the same was required to be passed on by the Respondent to his recipients. Hence, the provisions of Section 171 of the CGST Act, 2017 appeared to has been contravened by the Respondent, in as much as the additional benefit of ITC @2.11% of the base price received by the Respondent during the period 01.07.2017 to 30.04.2020, had not been passed on by the Respondent to all the recipients. On this account, the Respondent had realized a....
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....18% was charged on services. Hence, there was excess 20% increase in tax paid on procurement of services and the same should be excluded from profiteering amount. c. Benefit of WCT paid in ore-GST should be considered:- While calculating the profiteered amount, the DGAP had not considered the benefit of WCT (viz. works contract tax) paid in pre-GST period. However, he was eligible to avail the credit of WCT and the same should have been taken Into consideration for calculation of profiteering amount for the period FY 2016-17 & 2017-17 (April-June-17). The Respondent has submitted documents/details for deposit of WCT for the period FY 2016-17 & 2017-17 (April-June-17) with proof of payment after deduction of WCT. d. Buyer's confirmation:- The DGAP has provided only 7-10 days to the home buyers for confirmation of the receipt of the benefit of ITC resulting in that some buyers could not send confirmation in short span of time, Due to very short period, It was possible that most of the buyers had even not seen the mails and could not revert. Now, post submission of report by DGAP some more customers had responded to the mall and had confirmed th....
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.... as credit for the purposes of computing the profiteering. The HVAT Act and Rules, did not provide for WCT as any Tax, nor did it fall within the definition of input Tax as per Section 2(w) of the HVAT Act. Further even if WCT was qualified as credit within the definition of ITC and was provided for, the same was not reflected as credit in any VAT return of the Respondent. Further, the DGAP was not authorized to check the conditions regarding availability of VAT credit under Section 42(2) of the HVAT Act, which was specifically upon the satisfaction of Assessing Authority, as defined under section 2(e) of the HVAT Act. Accordingly, any credit which was not reflected in VAT Returns could not be considered. As per practice, Investigation was based on the documents submitted by the Respondent and the data reflected In the Returns was analyzed in accordance with the relevant provisions. d. The investigation Report was required to be submitted by DGAP in a time bound manner and therefore a reasonable time was given for furnishing the requisite information. In order to ascertain the claim of the Respondent that the ITC benefit had been passed to the buyers, entire were sent on 1....
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....spondent did not submit any evidence. However, in instant case, in order to substantiate the claim, the Respondent had submitted all document details for deposit of WCT for the period FY 2016-17 & 2017-18 (April-June 17) as proof of payment of WCT. e. Further, in the case of Deepak Kumar Khurana vs. Sattva Developers Pvt Ltd. cited in 2019 (29) G.S.T.L. 374 (N.A.P.A.) (Order Date: 14.06.2019), the DGAP in his report submitted that the Respondent prior to 01.07.2017 was eligible to avail CENVAT credit of Service Tax paid on input services and deduction of the payment made to the registered contractors and sub-contractors on which VAT (c) 4% was being levied. Accordingly, the DGAP had considered WCT paid as ITC in pre-GST period. Therefore, the Respondent should be allowed benefit of WCT paid in pre-GST regime while calculating profiteering amount. f. Buyer's confirmation:-Post submission of report by DGAP some more customers had responded to the e-mail sent by the DGAP and had confirmed that they had received benefit of ITC and these additional confirmations from buyers must have been received by the DGAP after the report. Few customers had shared copy of email....
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....all be passed on to the recipient by way of commensurate reduction in prices." 2) The Central Government may, on recommendations of the Council, by notification, constitute an Authority, or empower an existing Authority constituted under any Jaw for the time being in force, to examine whether Input Tax Credits availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him. 10. One of the main contentions of the Respondent in the present case is that profiteered amount should be limited to Excise Duty viz. CGST paid on purchase of goods only for which input tax credit was not available in the pre-GST regime. In respect of the above contention of the Respondent, it is relevant to mention here that Section 171 (1) of the CGST Act, 2017 provides 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." It is clear from the plain reading of the above provision that it mentions "reduction in the rate of tax or benefit of ITC" which mean....
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....st-GST period, it was 5.42%. Hence, it is clear that the Respondent had been benefitted from additional ITC to the tune of 2.11%. As per the provisions of Section 171 of the CGST Act, 2017, the Respondent is liable to pass on the benefit of additional ITC accrued to him on the introduction of the GST w.e.f. 01.07.2017. Hence, the contention of the Respondent that the excess increase in tax paid on procurement of services should be excluded from the profiteered amount is irrelevant and cannot be accepted. 12(a). It has also been argued that the DGAP had not considered the benefit of WCT (viz. works contract tax) paid in pre-GST period. However, he was eligible to avail the credit of WCT and the same should have been taken into consideration for calculation of profiteering amount for the period. In support of his claim the Respondent has relied upon the order of this Authority upheld in the cases Rahul Kumar vs. Emaar MGF Land Ltd. cited in 2020-TIOL-26 NAA-GST (Order Date: 11.12.2020) and Deepak Kumar Khurana vs. Sattva Developers Pvt. Ltd. cited in 2019 (29) G.S.T.L. 374 (N.A.P.A.) (Order Date: 14.06.2019). In this regard, this Authority upon perusal of VAT Assessment Order for ....
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....scussions, the Authority finds that the Respondent has profiteered by an amount of Rs. 3,52,59,318/- during the period of investigation i.e. July 2017 to April 2020. The above amount that has been profiteered by the Respondent from his home buyers shall be refunded by him, along with 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. 15. Th is 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. 16. The Respondent is also liable to pay interest as applicable on the entire amount profiteered, i.e. Rs. 3,52,59,318/e Hence the Respondent is directed to also pass on Interest @ 18% to the customers/ flat buyers/ recipients on the entire amount profiteered, starting from the date from which the above amount was profiteered till the date of passing on/ payment, as per provisions of Rule 133 (3) (b) of the CGST Rules 2017. 17. We also order that the profiteering amount of....
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....wo local Newspapers/vernacular press in Hindi/English/local language with the details i.e. Name of builder (Respondent) - M/s Haamid Real Estate Pvt. Ltd, Project- The Peaceful Homes', Location- Gurgaon, Haryana and amount of profiteering so that the concerned homebuyers can claim the benefit of ITC if not passed on, Homebuyers may also be informed that the detailed NAA Order Is available on Authority's website www.naa.gov.In. Contact details of concerned Jurisdictional CGST/SGST Commissioner may also be advertised through the said advertisement. 22. The concerned jurisdictional CGST/SGST Commissioner shall also submit a Report regarding compliance of this order to this Authority and the DGAP within a period of 4 months from the date of receipt of this order. 23. Further, the Hon'ble Supreme Court, vide its Order dated 23.03.2020 in Suo Moto Writ Petition (C) no. 3/2020, while taking suo-moto cognizance of the situation arising on account of Covid-19 pandemic, has extended the period of limitations prescribed under general law of limitation or any other specified laws (both Central and State) including those prescribed under Rule 133(1) of the CGST Rules, 2017, as Is ....
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....17 Surinder Jit Singh-II B271 47,765 18 Gagan Deep Gaba and Kapil Arora C293 32,546 19 Vivek Sood and Arti Sood A154 105,828 20 Vipul Kumar Garg and Deepika Garg B093 44,760 21 Arindam Sengupta and Paramita Sengupta A101 81,095 22 Pooja Sapra C163 33,874 23 Joslin Ehbok Myrthong C282 33,874 24 Nidhi Mehra B122 47,427 25 Amit Kataria B244 47,428 26 Sharad Mehrotra A151 81,095 27 Ankur Rastogi, Sulabh Rastogi and Rajiv Kumar B064 Rastogi 41,155 28 Sunil Thakur B193 107,990 29 Pramod Kumar Agarwal and Gaurav Mittal C181 33,874 30 Ankur Periwal C143 33,874 31 Virender Kumar Jain and Usha Jain C222 33,874 32 Pawan Khosla and Geeta Krishali B222 45,644 33 Ajay Agarwal and Renu Agarwal B214 46,482 34 Bhupender Singh C083 35,294 35 Hemant Sethi and Prem Lata Sethi B051 46,086 Gnyandeep Kantipudi & Bhanu Financial Services 36 B282 Pvt. 46,090 37 Snazzy Properties Pvt. Ltd. - II A172 82,706 38 Snazzy Properties Pvt. Ltd. - III A202 82,706 39 Snazzy Properties Pvt. Ltd....
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....nkush Vohra and Namita Vohra B182 47,427 86 Ramesh Ahuja B061 154,290 87 Shefall Mittal A223 97,355 88 Garima Ganeriwala C292 36,403 89 Namrata Ahuja C124 42,580 90 Gaurav Khatri and Neelam Khatri C063 33,979 91 Shalini Shaswat Kumar C084 74,952 Case No. 39/2022 Gajender Singh & Ors. vs. M/s Haamid Real Estate Pvt. Ltd. Page 2 of 6 92 Sanjiv Sachar A212 88,731 93 Sanjeev Mohanty and Guneet Malik B313 44,760 94 Saurabh Singh B264 47,107 95 Gunjan Chadha and Amardeep Singh Chadha C271 35,732 96 Nandita Jain and Sushil Jain C144 35,732 97 Atul Kumar Garg and Manoj Gupta C054 35,017 98 Akhil Agarwal C204 33,474 99 Richa Vaid and Pooja Mehtani C182 33,308 100 Wilima Wadhwa C142 34,312 101 Avnish Gupta and Prashant Trivedi C081 105,821 102 M Kadappan C121 36,403 103 Himanshu Gupta and Jhoomur Gupta B041 47,107 104 Gautam Suri B113 48,030 105 Chanchal Tiwari B273 48,952 106 Pawandeep Singh Oshan and Amandeep Singh Oshan A152 84,954 107 Mayank Kaushik A232 120,099 1....
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.... A063 361,117 156 Satinder Singh Sondhi and Sunita Sondhi - II A083 348,261 157 Swarnganga Towers Pvt. Ltd. A163 361,117 158 Munish Jindal B033 44,712 159 Neera Raj C294 10,644 160 Reyaz Ahmad and Huma Faruque Ali B124 247,155 161 Narinder Kaur C302 * N 162 Manu Kashyap and Ms. Angela N Kashyap B293 150,768 163 Nitasha Jain and Viksit Jain C113 44,544 164 Sanjay Sachdeva & Richa Sachdeva A143 85,877 165 Jaskaran Surana C244 56,536 166 Shanta Surana C011 113,072 167 Bijender & Ratika Ruhil B243 27,455 168 Prerit Shrivastava /Namita Shrivastava B054 285,596 169 Atul Jain C212 33,308 170 Atul Nayar - II A204 95,183 171 Yogesh Malhotra & Abhilasha Malhotra A244 393,866 172 Prasant Patnaik C064 169,720 173 Tavishi Malaviya C123 207,703 174 Pradeep Dahiya B274 316,488 175 Nick Mehta C223 218,243 176 Promila Gupta & Ramesh Gupta B012 279,601 177 Shakti Malaviya A072 298,335 Suneel Kumar Rastogi & Anshul Rastogi & 178 Ruchika Chaudhry Rstogi & Beena Rastogi B062 278,323 1....