TaxTMI 
TaxTMI 
2022 (8) TMI 210
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....by him. The Applicant No. 1 had stated that he had purchased a flat No. F-1603. Tower-F in the Respondent's project "Anmol Fortune", Goregaon and had alleged that the Respondent had not passed on the benefit of Input Tax Credit (ITC) to him by way of commensurate reduction in the prices. 2. The DGAP in its report dared 31.12.2020. inter-alia, has stated that:- a) The Standing Committee on Anti-profiteering examined the application filed by the Applicant No. 1 in its meeting held on 13.09.2019 and the minute of which were received in DGAP on 09.10.2019, whereby it was decided to forward the same to the DGAP to conduct a detailed investigation in the matter. Accordingly, investigation was initiated to collect evidence necessary to determine whether the benefit of input Tax Credit had been passed on by the Respondent to the Applicant No. 1 in respect of construction service supplied by him (Respondent). b) The Applicant No.1 has submitted the following documents along with his application:- i. Duly filled in form APAF -1 ii. Copy of the demand letter. iii. Copies of the Agreement to sell and Agreement to construction iv, Summary or Agre....
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...., 31.07.2020, 04.08.2020, 05.08.2020. 07.08.2020, 08.08.2020, 11.08.2020, 21.08.2020 and 31.08.2020. The derailed submissions of the Respondent to the DGAP have been summed up below wherein. inter-alia, it was stated that:- i. that they where engaged in construction of residential properties and they had taken three project named as "Anmol fortune l (Tower-C)", "Anmol Fortune II (Tower-F)" and Anmol Fortune III (Tower-E)" in 2004 situated at M G Road, Unnat Nagar No. 1, Goregaon West, Mumbai. Each tower was considered as a different project in RERA. The "Anmol Fortune-I was completed in Pre-GST and Pre-RERA Period and hence the same was not registered under RERA. They had taken the Separate RERA registration for the Project "Anmol Fortune-II" and Anmol Fortune-III". The Projects details was given as under:- Project Name Tower Name Launch Date Completion Date Date of OC Anmol Fortune-I C 23.02.2006 05.10.2016 05.10.2016 Anmol Fortune-II F 08.02.2014 05.11.2018 05.11.2018 Anmol Fortune-III E 09.06.2014 In Progress Not Recevied ii. That the Flat sold to the applicant i.e. Mr. Atul Waichal was in F-Tower/Wing....
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....efit of ITC to customers as the documentary evidences, h) All the details/ information submitted by the Respondent was to be treated as confidential in terms of Rule 130 or the Central Goods and Services Tax Rules, 2017. i) The subject Application, various replies of the Respondent and the documents/ evidences on record had been carefully examined. The main issues for determination were:- i. Whether there was benefit of reduction in Rate of tax or ITC on the supply of Construction Service by the Respondent after implementation of GST w.e.f. 01.07.2017 and if so, ii. Whether the Respondent passed on such benefit to the Recipients by way of Coy in reduction in price, in terms of Section 171 of the CGST Act. 2017. j. Upon scrutiny or the documents submitted by the Respondent, it was observed that:- i. The Respondent vide their letter dated 18.08.2020 claimed that they had arrived at the negotiated sale price after considering the GST credit benefit in respect or units booked/sold after 01.07.2017. However. it is observed on perusal of Cost Sheet and Agreement For sale that in the Agreement nowhere it has been mentioned that the benefit of ITC o....
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....88.000 - - 1,54,560 14,42,560 7. On completion of 24^th Floor Slab 17.08.2017 12,88.000 - - 1,54,560 14,42,560 8. On completion of Terrace Floor Slab 14.11.2017 12,88.000 - - 1,54,560 14,42,560 9. On completion of Internal Flooring & walls 14.10.2017 12,88.000 - - 1,54,560 14,42,560 10. On completion of Electrical Work & Internal Painting 15.07.2018 12,88.000 - - 1,54,560 14,42,560 11. On Possession 16.11.2018 52,64,000 6,47,000 - 7,48,140 66,59,140 Total 2,84,48,000 6,47,000 7,16,772 15,20,940 3,13,32,712 iii. According to pars 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 reads as "Sale of land and, subject to clause (b) of paragraph 5 of Schedule, sale of building", Further. clause (b) of Paragraph 5 of Schedule II of the CGST Act, 2017 reads 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 en....
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....l the inputs and input services including the sub-contracts. The Respondent submitted the details of input tax credit availed by them anti their turnover for the project "Anmol Fortune II (Tower-F)" during the pre-GST (April, 2016 to June, 2017) and post-GST (July, 2017 to September, 2019) periods, duly reconciled with their ST-3, VAT and GSTR-3B returns and credit registers, are furnished in Table-'B' below: Tabie-'B' (Amount in Rs) S.No. Particulars April 2016 to June, 2017(Pre- GST) July, 2017 to Sept, 2019 (Post-GST) 1. Credit of Service Tax Paid on Input Services (A) 2,06,77,329 2. Input Tax Credit of VAT paid on Inputs (B) - 3. Total CENVAT/VAT/Input Tax Credit Available (C=A+B) 2,06,77,329 4. Input Tax Credit of GST Availed (D) 4,67,26,531 5. Total Turnover from Residential Area (E) (Excluding post OC sale & cancelled units) 50,12,02,728 1,32,31,04471 6. Total Saleable Area (F) 1,32,587 1,32,587 7. Sold Area relevant to Turnover in Sq Ft. (G) 90,126 1,06,401 8. ITC proportionate to Sold Area (H=(C or D*G/F) 1,40,55,412 3,74,98,017 ....
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....nd or Profiteered Amount K=G-J 4,44,563 vii. From the Table- 'C' above, it was observed that the additional input tax credit of 0.03% of the turnover should have resulted in commensurate reduction in the basic price as well as cum-tax price. Therefore, in terms of Section 171 of the Central Goods and Services Tax Act, 2017, the benefit of the additional input tax credit should have been passed on by the Respondent to the recipients. In other words, by not reducing the pre-GST basic price by 0.03% on account of additional benefit of input tax credit and charging GST @ 12% on the pre-GST basic price, the Respondent appear to have contravened the provisions of Section 171 of the Central Goods and Services Tax Act, 2017. viii. On the basis of the aforesaid CENVAT input tax credit availability in the pre and post-GST periods and the demands raised by the Respondent on the Applicant and other home buyers towards the value of construction on which GST liability @ 12% was discharged by the Respondent during the period 01.07.2017 to 30.09.2019, the amount of benefit of input tax credit not passed on to the recipients or in other words, the profiteered a....
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....and Acknowledgements (sample basis). xi. On being asked to confirm the receiving of the benefit of ITC, the Applicant vide email dated 25.09.2020 informed that he has received an amount of Rs. 60,305/- from the Respondent. Further, the Respondent vide email dated 13 11.2020 provided the email IDs of 84 customers including the Applicant. The DGAP sent Email to all 83 customers for confirmation of whether ITC benefit has been passed on to them. Responses from I0 customers have been received till date, all of whom have confirmed the receipt of benefit of ITC and no denials have been received so Far. k) the above computation of profiteering was with respect to 97 customers from whom payments had been received by the Respondent during the period 01.07;2017 to 30.092019, whereas the Respondent have booked a total number or 117 flats till 30.09.2019. Out of remaining 20 (16+4) units, 16 units were hooked after receipt of OC i.e. during the period 05.11.2018 to 30.09.2019 (investigation period) and 04 were those that have been cancelled as mentioned in Table-D above. In pre-GST period (April, 2016 to June, 2017), demands were raked from 85 buyers who had booked the units and th....
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....customers. However, the Applicant No. 1 did not submit any submissions against the DGAP's report. 4. Copy of the above submissions dated 02.02.2021 of the Respondent was supplied to the Applicant No. 1 and to the DGAP to file their reply and clarifications respectively. However, the Applicant No. 1 has not submitted any written submissions in respect or the above submissions of the Respondent. The DGAP tiled his supplementary/verification report dated 10.03.2021 and has inter-alia stated that :- i. the Respondent was requested to provide the details of benefit passed on to the home buyer along with necessary documents like Credit Notes, Account Ledgers of the home buyers and also provide the email id's and phone numbers oldie home buyers. ii. the Respondent has claimed to passed on the ITC benefit to the home buyers us tabulated below:- S.No. Description Particulars No. of Flats ITC benefits passed (in Rs.) Remarks 1. Flats sold in pre-GST out of 89, flats cancelled later on 89 47,76,830/- 1,00,698/- Passed on the benefit through Credit Voucher (Out of 89.4 flats were cancelled later on) 2. Flats sold post-GST b....
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....not appear for the hearing. During the personal hearing the Respondent has re-iterated that they had produced their documents and records as and when required by the office of DGAP. The Respondent has accepted liability in respect of 'Tower F' of" Anmol Fortune". 8.1 his Authority has carefully considered the Reports of the DGAP, submissions made by the Respondent and the case record. It is on record that Applicant No. 1 had filed a complaint alleging that the Respondent has not passed on the benefit of ITC to him by way of a commensurate reduction in the price of the flat purchased by him (Applicant No. 1) from the Respondent. The Authority finds that the DGAP, after investigation, has calculated that the Respondent got additional benefit of input tax credit of0 .03% of turnover amounting to Rs.4,44,563/- (inclusive of GST) for the project `Anmol Fortune II Tower-F)'. The DGAP has concluded that this benefit of Rs 4,44,563 was required to be passed on to the recipients. However, the Respondent has claimed to have passed on the benefit of an amount of Rs. 58,65,423/-. 9. Section 171 of the CGST Act provides as under:- "Any reduction in rate of tax on any ....
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.... benefit from the Respondent, the remaining home buyers did not respond to the communication made by the DGAP. Thus, evidence in respect of only 23 out of 117 customers has been submitted. Hence, such verification is neither definite nor conclusive. The claim of their refund along with the interest @18% thereon, from the date when the above determined profiteered amount was profiteered by him till the date of such payment, in line with the provisions of Rule 133 (3) (b) of the CGST Rules 2017, need to be verified by the concerned CGST/SGST Commissionerate. 11. This Authority under Rule 133 (3)(a) of the CGST Rules, 2017 orders that the Respondent shall reduce the prices to he realized from the buyers of the flats/Customers commensurate with the benefit of ITC received by him as has been detailed above. 12. The concerned jurisdictional CGST/SGST Commissioner is directed to ensure compliance of this Order. It may be ensured that the benefit of ITC i.e. profiteered amount is passed on by the Respondent to each recipient of supply us it in paragraph 9 and 10 Elbow along with interest @ 18%, wherever applicable. from the date that such amount was profiteered till the date of re....