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2022 (8) TMI 364
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....i Florence", Ahmedabad, Gujarat. The Applicant No. 1 has alleged that the Respondent had not passed on the benefit of ITC to him by way of commensurate reduction in price after the implementation of GST w.e.f. 01.07.2017. 2. The DGAP has stated that receipt of the reference from the Standing Committee on Anti-profiteering, a notice under Rule 129 of the Rules was issued on 04.08.2020. 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 supporting documents. Further, in terms of the said notice dated 04.08.2020, the Respondent was also given an opportunity to inspect the nonconfidential evidences/information between 18.08.2020 to 20.082020. However, the Respondent did not avail of the said opportunity. 3. The DGAP has submitted that vide e-mail dated 08.10.2020, the Applicant No. 1 was given an opportunity to inspect the nonconfidential documents/reply furnished by the Respondent on 14.10.2020 to 16.10.2020, which the Applicant No. 1....
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.... ST-3 and GSTR-3B returns. (m) Details of VAT, Service Tax, ITC of VAT, CENVAT credit for the period April, 2016 to June, 2017 and output GST and ITC of GST for the period July, 2017 to July, 2020 for the project "Swati Florence" along with documentary evidence. (n) Details/ List of home buyers of the project "Swati Florence". 7. The DGAP has also stated that the subject application, the 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 input tax credit on the supply of construction service by the Respondent after the introduction of GST w.e.f. 01.07.2017 and if so, ii) Whether such benefit was passed on to the recipients in terms of Section 171 of the Central Goods and Services Tax Act, 2017. 8. The DGAP has also mentioned that the Respondent vide letter dated 07.09.2020, submitted copy of OC dated 28.09.2018, wherein it had been mentioned that the impugned project was Residential Affordable Housing. The Respondent vide reply dated 24.11.2020 submitted that he had sold 24 units under Credit ....
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.....2017, i.e., before the GST was introduced, the Respondent was eligible to avail CENVAT credit of Service Tax paid on input services and credit of the VAT amount paid on the purchase of inputs. However, the CENVAT credit of the amount of Central Excise Duty paid on inputs was not admissible as per the CENVAT Rules in force at the material time. It was found that the Respondent had not availed any credit of VAT in the monthly VAT returns filed. Therefore, the credit of the VAT amount paid on the purchase of inputs and the VAT turnover was not considered for computation of the ITC ratio to taxable turnover for the pre-GST period, as mentioned above. Further post-GST, the Respondent could avail ITC of GST paid on inputs and input services including the sub-contracts. From the information submitted by the Respondent duly verified from the GSTR-1 and GSTR-3B Returns for the period July, 2017 to July, 2020, the details of the ITC availed by him and his taxable turnover for the project "Swati Florence" during the said periods has been furnished by the DGAP in Table-B below:- Table-'B' (Amount in Rs.) S.No. Particular Total (Pre-GST) Total (Post-GST) (1) (2) (3) ....
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.... 'C' above (%) C 2.31% 8.64% 4 Increase in tax rate post-GST (%) D=12% less 4.5% - 7.5% 5 Increase in input tax credit availed post-GST (%) E=8.64% less 2.31% - 6.33% 6 Analysis of Increase in input tax credit: 7 Base Price collected during July, 2017 to July, 2020 (excluding turnover related to units sold post OC) F 63,86,78,536 8 GST Collected @ 12% over Basic Price G=F*12% 7,66,41,424 9 Total Demand collected H=F+G 71,53,19,960 10 Recalibrated Basic Price I=F*(1-E) or 93.67% of F 59,82,60,184 11 GST @12% J=I*12% 7,17,90,022 12 Commensurate demand price K=I+J 67,00,40,206 13 Excess Collection of Demand or Profiteering Amount L=H-K 4,62,79,754 14. The DGAP has intimated that from the Table-'C' above, it was clear that the additional ITC of 6.33% of the taxable turnover should have resulted in commensurate reduction in the base price as well as cum-tax price. Therefore, in terms of Section 171 of the CGST Act, 2017, the benefit of the additional ITC was ....
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....e email addresses of the home buyers. The Respondent vide reply dated 06.11.2020 submitted that he was not maintaining the records of email address, hence, was unable to provide the same. Therefore, the Applicant No. 1 vide email dated 19.11.2020 was requested to provide email address of home buyers, if available The Applicant No. 1, vide email dated 19.11.2020 submitted email address of 177 home buyers. An email dated 19.11.2020 was written to these 177 home buyers to confirm the receipt of benefit of ITC. Out of the sent 177 emails, 36 emails were received. Out of 36, 32 confirmed the receipt of benefit of ITC from the Respondent and 04 home buyers (other than applicant) denied the receipt of any benefit. Out of 04 who had denied the receipt of benefit, 02 units had been sold post OC, as per home buyers list submitted by the Respondent Out of remaining 02, 1 had not accepted the benefit passed on by the Respondent and had not received the cheque, as discussed in para 19 supra. The other one had not been passed on any benefit, as claimed by the Respondent. Thus, the amount of Rs.1,18,873 was also to be passed on to this home buyer. 19. A summary of category-wise ITC benefit req....
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....e Applicant No. 1. This amount (Rs.2,77,63,643/-) included both the profiteered amount of the taxable amount (base price) and GST on the said profiteered amount from other recipients as well who was not applicant in the present proceedings. These recipients were identifiable as per the documents on record provided by the Respondent giving the names and addresses along with unit no, allotted to such recipients. Therefore, this additional amount of Rs.2,77,63,643/was required to be returned to such eligible recipients. 22. The above Report was carefully considered by this Authority and a notice dated 04.12.2020 was issued to the Respondent to explain why the Report dated 27.11.2020 furnished by the DGAP should not be accepted and his liability for profiteering in violation of the provisions of Section 171 should not be fixed. The Respondent was also directed to file his written submissions by 17.12.2020. In reply to the notice dated 04.12.2020, the Respondent filed his submissions dated 21.01.2021, 25.03.2021 and 16.09.2021. 23. The Respondent and the Applicant No. 1 were also granted hearing by way of video conferencing on 29.03.2022. The Applicant No. 1 appeared for the heari....
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...., he has wrongly availed the VAT Credit of Inputs held in Stock as on 30.06.2017 in Table 7(a) - Duties and taxes on inputs instead Of Table 7(c) - VAT and Entry Tax paid of TRAN-1. He had intimated the error to Gujarat VAT Authorities vide letter dated 27.08.2020 for accepting the said form. Copy of letter is also enclosed. Hence. referring the above-mentioned facts, he has requested to consider TRAN-1 in Pre GST ITC for the calculations of anti-profiteering amount. f. That the DGAP has taken Carpet area of units sold in the calculation, but build-up area should be taken, because conveyance deed was executed for "build-up area" and not only the "carpet area". While calculating the profiteered amount, the DGAP has considered the Total Saleable Area as 19875 sq. mt. which is the Carpet Area of the project However, as per the BU Certificate the Total Saleable Area of the project came out to be 39599.57 sq mt. (Build-up area). He has sold portion of the Common Area along with Carpet Area. Hence, total saleable area should be inclusive of Common Area. Hence, while computing the profiteered amount, 'Build-up Area' should have been considered by the DGAP in place of 'Car....
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....ry or convenient for its maintenance, safety, etc., and in common use; Formula to calculate these areas are as follows: Carpet Area = Area of bedroom + living room + balconies + toilets - the thickness of the inner walls Built-up Area = Carpet area + area of walls + area of balcony Super Built-up Area = Built-up area + proportionate common area h. That in the Allotment Letter dated 12/06/2017, the Agreement to Sale dated 20/06/2017 and the Sale Deed dated 25/10/2018 issued to the Applicant No. 1, the Respondent has clearly mentioned the area to be sold to him would be (super built up area). i. That regarding the difference of 208 and 284 sq. mt., the Respondent submitted that in our previous replies he have some erroneous facts of the area of the Project as his internal data was scattered and reconciliation was not happened properly. Hence the revised one to be considered in the calculation. j. That all the communications of the Applicant No. 1 were baseless as he never denied him the payment of the benefit of ITC as claimed by him. k. That as per his calculations. he calculated the profiteered amount as per th....
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.... 74,878,672 10 Commensurate demand price K=I+J 698,887,601 11 Excess Collection of Demand or Profiteered Amount (Inc. GST) L=H-K 16,452,359 24. Clarifications under Rule 133(2A) of the CGST Rules, 2017 were also sought from the DGAP on the submissions dated 21.01.2021 and 25.03.2021 filed by the Respondent. The DGAP has filed his clarifications dated 12.02.2021 and 11.06.2021 vide which he has stated:- a. That the details/data has been collated from the statutory documents/ information submitted by the Respondent. However, on re-verification it was found that the amount of Cess on S. Tax has not been added in the pre-GST period which is Rs.3,00,902/-. Considering the above fact, the Ratio of CENVAT to turnover would increase from 2.31% to 2.38% and profiteering may reduce from 6.33% to 6.26%. b. That the main focus for the calculation of profiteering is to pass on the additional benefit of ITC accrued to the Respondent and the profiteering, if any, is determined at a point of time when demand is raised from the customer, and benefits of additional ITC as available should be passed on to the customers at tha....
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.... embedded in the cost of the goods or services supplied, resulting in increased price. With the introduction of GST w.e.f. 01.07.2017, all these taxes got subsumed in the GST and the input tax credit of GST is available in respect of all goods and services, unless specifically denied. The method adopted is to find out the ratio of CENVAT/ITC to taxable turnover in the pre-GST era as well as post-GST era, which is nothing but an exercise to find out the accrual of additional amount of ITC. if any, in the post-GST era h. That as per Rule 126 of the CGST Rules, 2017, this Authority has been empowered to determine the methodology and procedure for determination as to whether the reduction in the rate of tax or the benefit of ITC has been passed on by the registered person to the recipients by way of commensurate reduction in prices. i. That the Authority in exercise of power delegated to it under the Rule 126 has notified the Methodology & Procedure vide Notification dated 28.03.2018 which is also available on the website. However, it is submitted that no fixed/uniform mathematical methodology can be determined for all the cases of profiteering as the facts and circum....
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....ion added to an existing statute is to clarify the confusion and to convey the intent of the provisions. Hence, it has retrospective effect. m. That the DGAP has considered area from the home buyer list, as submitted by the Respondent during the investigation. In the homebuyer list, size for each flat is mentioned as 75 Sq. Mt. and the same was considered for calculation of profiteering. Hence, there was no error in calculation of area of the project. Therefore, the contention of the Respondent was not acceptable. n. Further, from the perusal of details given by the Respondent, it is observed that the entire exercise taken by the Respondent is to increase the ratio of turnover and CENVAT in pre-GST and to decrease the ratio of turnover and CENVAT in post GST period. To achieve this goal, they have given a new range of area of fiats varying between 79.78 sq. mt. to 79.96 sq. mt. The DGAP has calculated the profiteering as given by the Respondent and has been kept as same in pre and post GST era. o. That as per the home buyer list submitted by the Respondent, the saleable area was mentioned as 75 sq. mt. The Respondent had not made any submission regarding ....
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....issions vide e-mail dated 30.03.2022 and has submitted copy of Sale Deed, Agreement for Sale, Allotment Letter, Index Copy and Invoice issued to him by the Respondent. The Respondent has filed his consolidated written submissions dated 6.04.2022, has been no reduction in the rate of tax in the post GST period; hence the only issue to be examined is as to whether there was any net benefit of ITC With the introduction of GST. 29. 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 2.31% and during tie post-GST period (July-2017 to July-2020), it was 8.64%. Hence, according to the DGAP, post-CST. the Respondent has been benefited from additional ITC to the tune of 6.33% [8.64% (-) 2.31%] 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/customers is Rs. 4,52,79,754/-. 30. The Respondent has contended that while calculating the profiteered amount, the DGAP has not considered the CENVAT Credit o....
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....list provided by the Respondent Considering the figures of 'Total Saleable Area' and 'Sold Area' from the home buyers list is the standard mathematical practice adopted while calculating the benefit of additional ITC required to be passed on by any Construction Services provided to his customers/home buyers/recipients. Hence, if 'Built-up Area' is considered in place of 'Carpet Area', we would arrive at incorrect amount of profiteering. Hence, the above contention of the Respondent is not correct and cannot be accepted. 32. It has also been contended by the Respondent that the DGAP has adopted incorrect figures of Area Sold Relevant to Turnover in the pre and post GST period as 9.750 sq. mt and 16,275 sq, mt. respectively, whereas as per his calculations, it should have been 9,958 sq. mt. and 16.559 sq. mt. respectively. With respect to the above contention of the Respondent, we find that the DGAP has taken the figures of the Area Sold Relevant to Turnover' from the data provided by the Respondent during the investigation. Hence, the same has been taken from the home buyers list provided by the Respondent. Any such claim regarding the incorrec....
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....to the recipients? 28. We find that, Section 171 (1) of the CGST Act. 2017 deals with two situations one relating to the passing on the benefit of reduction in the rate of tax and the second pertaining to the passing on the benefit of the ITC. On the issue of reduction in the tax rate, it is apparent from the DGAP's Report that there 34. The Respondent has also submitted his own calculations and arrived at profiteered amount of Rs.1,64,52,359/-. The above profiteered amount was arrived at by including the CENVAT/ITC of VAT amounting to Rs.69,49,098/- and considering the Build-up Area of 39,599.57 sq. mt. as the Total Saleable Area in place of the Area of 19,875 sq. mt. considered from the homebuyers list. In this regard, this Authority finds that the above profiteered amount calculated by the Respondent is incorrect as the inclusion of the CENVAT Credit of VAT amounting to Rs. 69,49,098/- is not possible as the Respondent has not produced any VAT Return/VAT Assessment Order evidencing that he was eligible to avail the above credit of VAT. Further, the exact quantum of profiteering cannot be computed by considering the Build-up Area in place of the Area from the homebuyers....
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.... his customers/home buyers/recipients in the above project 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 refund/return/payment, in accordance with the provisions of Rule 133 (3) (b) of the CGST Rules 2017. 38. This Authority under Rule 133 (3) (a) of the CGST Rules. 2017 orders that the Respondent shall reduce the prices to be realized from the buyers of the customers/home buyers/recipients commensurate with the benefit of ITC received by him as has been detailed above. 39. The Respondent is also liable to pay interest as applicable on the entire amount profiteered, i.e. Rs.4,52,79,754/-. 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. 40. We also order that the profiteering amount of Rs. 4,52,79,754/- along with the interest @ 18%. from the date of receiving of profiteered amount from the customers/home buyers/recipients till t....
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....while taking suo-moto cognizance of the situation arising on account of Covid-19 pandemic, has extended the period of limitation prescribed under general law of limitation or any other special laws (both Central and State) including those prescribed under Rule 133(1) of the CGST Rules, 2017, as is clear from the said Order which states as follows:- "A period of limitation in all such proceedings, irrespective of the limitation prescribed under the general law or Special Laws whether condonable or not shall stand extended w.e.f. 15th March 2020 till further order/s to be passed by this Court in present proceedings." Further, the Hon'ble Supreme Court, vide its subsequent order dated 10.01.2022 has extended the period(s) of limitation till 28.02.2022 and the relevant portion of the said order is as follows:- "The Order dated 23.03.2020 is restored and in continuation of the subsequent Orders dated 08.03.2021, 27.04.2021 and 23.09.2021, it is directed that the period from 15.03.2020 till 28.02.2022 shall excluded for the purposes of limitation as may be prescribed under any general of special laws in respect of all judicial or quasi-judicial proceedings. " Acco....
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....UMAR A-701 154,035 BHAVNAGEN DIPAKEHAT 20 SHAH A-70 248,136 SHAH DEVANSH DEEPAK BHARAT NATVARLAL 29 PAREKH A-703 25.518 RASHKUMAR 28 DALSUKHRAI MEHTA A-704 154,413 NILANG MAHESHBHAI 4-8801 29 71,002 SHASTR MAYURIGEN NILANG SHASTRI 30 MAULIK KUMAR N VIRPARIA HUPALDEN M. VIRPARIA A-802 201,030 PARIKH CHETNA 31 MARIAH RAVI NAILESHBHAL 32 SHILPY CANALIHA PARIO NAILESH GOVINDSHA KAMAL KANT KANAUHA A-1032 148280 NAILESHBHA 3-304 192,345 PAYAL JAIN RAHUL JAIN A-901 34 ASHEX GOENKA A-902 254,380 RATHI PUSIPA MITHANKUMAR KESHAVIAL MITHANKUMAR RATH A-905 133,215 36 TEJAL J. MAITHIYA A-004 171,700 BHARGAVKUMAR $7 KARGOVINDBHAI CHAUHAN HARGOVINDBHAI SAVBHA CHAUHAN A-1001 220,348 38 DINESH BABULAL KANODIA DISHANK DINESH KANODIA A-1002 230,270 VADHER VIRBHADILASINN A-100 19 SHANSHYAMSINH 335,111 40 JAGAT PARTAP SINGH SHANTILAL GORDHAN SHIVALI SHARMA A-1004 SAVALIA A-1101 144.279 Case No. 52/2022 Nilang Shastri & Ors. Vs. M/s Swati Realty Page....
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.... 20 BIRENDRA NATH MANDAL JAYSHREE MANDAL 8-504 179.002 6-60 349,745 77 RANIANA BHARAT JOGI PANKESH BHARAT JOGI 7% MUKESHKUMAR VERMA AVANIDEN SAGANKUMAR NEFFU VERMA PARMAR SAGARKUMAR 6-602 212, 79 NO PARMAR GHANSHYAMBHAI FULAGHAI GOHEL RAIENDRAKUMAR 8-603 WYOTSNAMEN & GOHL 8604 7,608 OHARA JEPAL SHAH JEPAL HIMANSHU SHAH 1-701 117,572 HITESH ASHOK KUMAR 62% BHCJWAN KIRAN ASHOK KUMAR BHOWANI -702 352,465 CHIRAG PRAHALADRHA AN JOSHI 8-709 282.095 MUKESH CHOITHRAMANI RAJNI MUKESH CHOITHRAMANI #704 76538 85 VINEET KHANDELWAL 16 IMINISH A PANDIT NICHE KHANDELWAL PRIYANTAL PANDIT 0-801 198337 8-802 356,480 Case No. 52/2022 Nilang Shastri & Ors. Vs. M/s Swati Realty Page 2 of 6 87 DHARA B. SHAH BOBBY SHAH B-803 280,465 88 BHOOMI DAVE ASHISH SAGAR 8-804 233-005 SACHIN MOHANBHAI 80 B-901 TANDEL KANCHAN SACHIN TANDEL 129.516 SHASHIKANT VITHALDAS VIVEK KUMAR SHASHIKANT B-902 90 91 CHHATRALA SHAH VIHANG CHANDRAKANT CHHATRALA 135,642 B-903 R....
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.... 150.512 0403 84,202 C-404 16.582 C-501 107,034 PATEL PARESHBHAI 130 RANCHOOLAL C-500 116,170 131 MITTAL M SHARMA C-503 132 KRISHNA RANJAN SINNA SUMUIYA KUMARI 0504 AMITA SHIVADEV RAO ISA SHINDE SHIVADEV RAD SHINDE C-601 106.367 134 GAURANG H PARMAR SARITA & PARMAN C-602 179,631 Case No. 52/2022 Nilang Shastri & Ors. Vs. M/s Swati Realty Page 3 of 6 135 PRITHIANI PRACHI VISHAL VISHAL VASUDEV PRITHIANI C-600 300,478 136 137 RAVI GUPTA PREETI SHUKLA PATHAK CHANDRAMAULI JYOTI GUPTA C-604 201,322 PIYUSH SHUKLA C-701 106,406 138 PRAVINKUMAR PATHAK HETAL CHANDRAMAULI C-702 283,584 139 NAMRATA NIPUN SHARMA NIPUN ATULKUMAR SHARMA C-703 199.392 140 ANKUSH PRAVIN MUKUL RUDDHIMA ANKUSH MUKUL C-704 BATUKBHAI VALLABHBHAI 141 VASOVA C-801 155 983 142 MEETA CHAUHAN C-802 248,136 143 SHIVANGEE JAISWAL C-803 211,057 144 SEEMA BIRLA C-804 128,648 145 SUNIL BRATI C-901 94.397 146 DHARMESH P SONI C-902 243,812 142 YARIKA WADHWANI C-903 ....
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.... D-602 60,186 DEVIDAS MAHEDEORAD 187 CHOUDHARY BHARTI DEVIDAS CHAUDHARY D-603 233,461 KALPESH KUMAR P 188 BORSADIYA D-604 107,721 JAYANTILAL MAGANIAL D-701 189 132,227 PARMAR MINAXI JAYANTILAL PARMAR DHAVAL KISHORBHAI 190 RATHOD PURVI DHAVAL RATHOD 0-7412 130,385 191 CHETANDHA CSHIVAL D-709 121,386 192 DEEPIKA ARORA 193 194 RATAN MALIRAM SHARMA HARESHKUMAR HARKISHANDAS DOSHI 195 PRAGNAREN PRATHOD HEMANT ARORA SOBHNABEN HARESHKUMAR DOSHI PRASHANT K RATHOD D-706 122,016 D-801 287.095 D-802 212,688 D-803 105.859 196 197 NIKHIL HARISH BHAI DHAVSAR PHILIPS JOHN D-804 . PHILOMINA PHILIPS D-902 300.800 198 NIRAV B VADODARIYA MINA & VADODARIYA BIPIN BVADOCARIVA D-902 147,321 199 200 201 JIGNA CHETANBHAI PATEL PRATIKSHA HATILAL HARISHAI DUDHATRA 0-905 248,136 BALKRUSHNAGHAI TANNA D-904 219,495 RAJAN RATILAL DUDHATRA D-1001 358.868 202 PIYUSH UPADHYAY NISHITHA TRIPATHI D-1002 . 203 DEVEN LALITKUMAR JOSH SHARMILA DEVEN JOSHI D-....